Annual effective rate

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The equivalent notional annual rate of interest applied - for example - to current, deposit and savings accounts assuming that all interest is reinvested or compounded.

AER is very similar to the Effective Annual Rate (EAR).

The term AER is more commonly used in the context of retail investment and retail savings rates, though not universally.

(The term EAR is used more generally in the wholesale context, both for borrowing and for investment.)

See also