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APR, AER .... what do they all mean??

Grumpy_Old_Duffer
Grumpy_Old_Duffer Posts: 689 Forumite
Part of the Furniture 100 Posts Combo Breaker
in Savings & investments
IF I had £1,000 to invest for 1 year, which would be best ... 5% APR or 5% AER, AND does it make a difference if interest is paid daily, weekly, monthly or yearly?

What would my investment be worth at the end of 1 year using the above options?

Any other weird & wonderful interest rate descriptions to confuse us? I can only think of APR & AER!!!

Totally :confused:.
It has taken about 4,500,000,000 (4.5 billion) years for the Earth to form as it is now .........
and it'll only take about another 100 years for mankind to really **** it up!!!!

Comments

  • Reaper
    Reaper Posts: 7,357 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    APR is a way of comparing savings/loans products from different companies. It tries to take into account charges as well as interest. Use this for comparisons but don't use it to try to work out how much you would earn/pay.

    AER is how much you would earn if you left the money saved (and any interest earned) untouched for a year. It is the one to use if you want to know how much money you will make.
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