11:17 21 November 2013
It's no secret that some people out there do not know the difference between AER and APR as it applies to interest rates; if you are one of such people, then this article is for you.
Annual Percentage Rate (APR) is the annual interest rate payable on acquisition of loans, mortgages are those charges acquirable from the use of credit cards; whereas Annual Equivalent Rate (AER) is the rate of interest you will earn in for the amount held in saving accounts. Higher AERs provides more interest for you on your credit and works in the same way as overdrafts, just that it’s the opposite.
Is it possible for the interest rate of a current account to change suddenly?
Interest rates on current accounts can be changed by the provider, as well as the Bank of England; but the provider is obliged to notify you on time before the new interest rates take effect.
How to identify good interest rates on current accounts
Is it ideal to compare current account interest rates?
Yes it is! Your overdraft can be reduced if you can carefully search for an account with lower interest rates charged on borrowing. It’s also possible you get the best company around in order to get the best benefits on your account.
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