What is Annual Equivalent Rate?

AER stands for 'Annual Equivalent Rate' and represents your actual return each year.

Savings accounts can work slightly differently between providers e.g. interest could be paid monthly, half yearly or yearly (annually). This is why AER exists: it provides a standardised way to compare rates easily. The AER rate also considers the benefit of compound interest (where interest also earns interest) and is the reason why it's higher than the gross rate.