💷 Equivalent Rate Calculator – AER
Convert a nominal interest rate into the Annual Equivalent Rate (AER) to fairly compare savings products with different compounding frequencies.
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What is AER?
The Annual Equivalent Rate (AER) shows what a nominal (stated) interest rate actually works out to once compounding is taken into account, letting savers compare accounts that compound at different frequencies on a like-for-like basis.
The formula
AER = [(1 + Nominal Rate / n)n − 1] × 100, where n is the number of times interest compounds per year. The more frequently interest compounds, the higher the AER will be relative to the nominal rate.
This calculator is for general savings-planning education.
Last reviewed August 2026