What does the acronym AER stand for?

Answer 1

The acronym 'AER' standards for 'Annual Equivalent Rate'. This is an estimate of the rate of interest a saver will receive on the balance of their savings account in a year, assuming that no withdrawals are made. For example, if a saver deposits $1,000 in a savings account paying an interest rate of 5% AER, at the end of the year the account balance would be $1,050. As some savings accounts pay interest on a monthly or quarterly basis rather than on an annual basis, the Annual Equivalent Rate calculation is used to make comparing savings accounts easier.