APY in one example
If you place money in an interest-bearing account, the bank may periodically add interest to your balance. Future interest can then be earned on both your original deposit and previously credited interest. APY packages that compounding effect into an annualized percentage.
APY vs. APR
APY is commonly used when money is earning interest, such as savings accounts and certificates of deposit. APR is commonly used when money is being borrowed, such as credit cards and loans. The details of a specific product still matter, but the direction is a useful memory aid: APY is usually about what cash earns; APR is usually about what borrowing costs.
Why a variable APY can change
Many savings-account rates are variable. The APY you see today may move later, which is why Plandime rate-based pages should display when rates were last checked.
Do not ignore conditions
An attractive advertised APY may apply only up to a balance cap, require qualifying activity or belong to a promotional period. Always read the rate conditions.
Use APY as one part of the savings decision
After understanding APY, compare fees, minimums, access and deposit-insurance structure before moving your cash.