Definition
A yearly deposit return that includes compounding.
Why it’s relevant today
Banks and fintechs compete for deposits by advertising APYs.
Why it matters
APY enables fair comparisons between compounding schedules.
3 months ago
APY
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This reminds me of our conversation about compounding interest. Financial acronyms and terminology feel very advanced, but reading the definition made me realize it was a clear connection to what we discussed on our first meeting. I realize I do know the definition of this word, so I’m going to select another word for this section.
Compounding is literally everywhere!!! Some APY rates compound daily, others weekly, quarterly and so on. We must check ourselves to know what the compounding schedule because chances are they will have one. And if so, the APY quoted on the bank branch window will differ a bit than the real rate you pay