What Does 5% AER Mean?

What Does 5% AER Mean?

1 Answer

  1. Hi Maitya, I think what you mean to ask here is in comparison with standard interest rate of 5%. Although its very important to understand that which interest rate would be higher and that would obviously the AER one. Also higher the interest rate, better the profit on your investment. So let’s say your standard interest rate is 5%, which is divided as 2.5% for 2 parts of six months, then by the end of the year your AER would be 5.06%, which would be greater than the one which you accrue at the end of the year alltogether.

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