With annual percentage yield, you can compare a number of interest rates that have different compounding periods. You have to take into consideration not only the interest rate but also the period of time you are going to invest your money for and the kind of interest (whether it's simple or compound). In order to make smart financial decisions, you have to remember that the final balance depends on a range of aspects. This measurement is used to estimate the potential gain from an investment or the final balance in a deposit account.
APY stands for annual percentage yield, otherwise called effective annual rate (EAR).
