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Confused by AER
msfender
Posts: 39 Forumite
Forgive me if I'm missing something blindingly obvious but I'm new to sorting out my finances and learning how things work! Correct me if I'm wrong but the AER refers to the interest earned if interest made on capital is left in an account and compounded yes? Therefore the equivalent to a higher interest rate than the gross APR? If that is the case why does moneyfacts.co.uk. list the Portman BS 15 Day Notice Mini Cash ISA as having a gross of 6.05% and an AER of 5.65%?
Thanks.
Thanks.
0
Comments
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The product has a 6 month introductory bonus, which skews the figures.
http://www.portman.co.uk/savings/tax_free_accounts/savings_product_detail.asp?ID=748
If you're considering applying, check this out...If you choose to transfer your account to another ISA provider, a £30 administration charge will also apply. :eek:0 -
AER shows what you earn compounded over a full year. The ISA rate reduces after 6 months.
Mike0
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