UK finance jargon - in plain English
The true yearly interest rate on savings accounts.
AER stands for Annual Equivalent Rate. It shows how much interest your savings will earn over a year, accounting for how often interest is compounded. It's the standard for comparing savings accounts in the UK.
Account A offers 4.9% AER paid monthly, Account B offers 4.85% AER paid annually. The AER figure strips out compounding differences so you can compare them fairly. Always use AER, not the headline rate.
Numbers simplified for illustration. Actual rates and tax rules may change.
Confusing AER with APR. AER is for savings (what you earn); APR is for borrowing (what you pay). They measure completely opposite things.