Annual Percentage Yield. The rate of return on an investment for a one-year period. For an interest-bearing deposit account, such as a savings account, APY is equal to one plus the periodic rate (expressed as a decimal) raised to the number of periods in one year. Due to compounding, the APY will be greater than the periodic interest rate multiplied by the number of periods in the year.

Use APY in a sentence

The Thompsons found that Acme bank offered the best APY on a savings account, allowing them to get the most money in interest, so they transferred their account there.

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You should always try to take on investments that have a very high APY so you are getting the most out of your money.

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My boss told me I was silly to put my savings in a savings account because the amount of money I would earn through interest was tiny because APY was so small.

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APT interest rate