Whats the difference between AER and APR?

shagzdan

Apologies if this has been covered but the search facility threw up abot thirty thousand mentions of it!
So Whats the difference between AER and APR?

grumbler

shagzdan wrote:

So Whats the difference between AER and APR?

Main difference is that AER is for savings, APR is for borrowing. Glossary of banking terms and organisations :

AER - this stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded each year. As every advert for a savings product which quotes an interest rate will contain an AER, people will be able to compare more easily what return they can expect from their savings over time.

APR - this refers to Annual Percentage Rate. It is intended to give people a more accurate idea of how much they are being charged when they borrow money. It allows people to compare the total cost of borrowing money for different types of loan, and lengths of time.

APR takes initial costs and charges into account.