AER | Understanding Logbook Loans
AER stands for 'Annual Equivalent Rate' and it shows the rate of interest a saver will receive over a year assuming the cash is left in the account for the full year.
For example -
- Deposit £1,000 in a savings account that pays an interest rate of AER 5%
- At the end of the year the account balance would be £1,050, the extra £50 being the interest paid
Note, the interest will normally be paid one of two ways -
- Monthly - at the end of the month the interest earned on the money gets credited to the account (usually this is a month in arrears so at the end of February the January interest will be paid)
- Yearly - interest is paid once per year on a set date (the bank will set this out in its terms and conditions)



