Connect with us
Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.


What is Annual Percentage Yield or APR?

What is Annual Percentage Yield or APR?

Annual percentage yield or APR happens to apply to merely digital accounts. The term actually shows the annual yield or the interest which is going to be paid on your accounts. These are the high precision interest rates which will be compounded on the basis of 365 days. Apart from investment-related options, these percentage yields are also going to be helpful to you when it comes to resorting to a loan option.

Revealing APR

APR is supposed to be a very resourceful tool when it comes to the context of assessing the amount of interest levels which you can have on your fund or resources.

To be very specific, Annual Percentage Yield is levied when you make an earning through some investment. APR is always associated with compounding interest levels all throughout the year. When you are earning then higher APR is good for you. However, when you are supposed to make some repayment then lower APR should be good for you.

In the economic world, your APR is considered to be highly important in connection with deposit certificates, money markets as well as with SBs. Your APR is going to show you how you make more money or profit through these aforementioned channels.

Interest rates and APR

There are many who think that interest rates and APR are the same things. It is not. Interest rates are normal rates levied on loan and mortgages. Whereas, APR stands for interest rates coupled with fees and all-inclusive taxes. Therefore, you always find APR to be greater than interest rates. However, APR might come in both fixed as well as variable forms.

APR is supposed to be a very resourceful tool when it comes to the context of assessing the amount of interest levels which you can have on your fund or resources.


There are at least two very significant reasons, which make APR a must for you. They are-

Monthly compounding facilities

While thinking of your APR, you must consider the fact that they come up with monthly compounding facilities. It actually helps you in enhancing your earnings.

Single payment facilities every year  

While dealing with APR-related to a loan or mortgage of yours, you do not have to go through too much of hassles. You can deal with it by making a single payment in a year.

Why is APR so invaluable?

APR is so invaluable because it is very simple in nature, in the first place. It includes all sorts of fees as well as taxes. At the same time, it is adjustable or flexible.

How do you calculate APR?

It does not require any rocket science to calculate APR. In order to come out with your precise APR you would have to add up the professional fees along with additional payments with the existing interest rates.

Three aspects to take care of

In order to make sure that you get the best incentives out of your APR you need to take good care of three essential aspects. They are

  • Annual payments
  • Closing costs
  • Origination fees

With these, you can control your APR better,

While giving a thought about APR you might also need to do some digging in terms of the EAR or effective annual rate. This is a specific know-how which will be of great help in terms of taking care of your compound interests. Being armed with the knowledge of APR, APY and EAR you will be in a better position as it comes to making decisions in terms of your loan or mortgage options.

Global Banking & Finance Review


Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!

By submitting this form, you are consenting to receive marketing emails from: Global Banking and Finance Review, Alpha House, Greater London, SE1 1LB, You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post