The percentage amount ordinarily advertised on
interest-bearing deposit accounts (savings accounts, checking accounts and CDs). Truth in Savings
regulations require this number be reported and it reflects the total interest to be received over
a 365-day year, regardless of the bank's own method of compounding (daily, weekly, monthly, etc.).
Therefore, the use of APY creates a level playing field through which to compare returns from bank
accounts and CDs that may use differing compounding methodology.