Equivalent Rate AER Calculator

Advanced AER calculator for accurate rate comparison across banks using nominal rate compounding frequency day count basis and optional fees Get instant charts clear explanations and exportable tables in CSV and PDF for audit ready reporting and smarter decisions today including monthly quarterly semiannual and daily compounding modes supports 365 and 360 conventions validation

Inputs
Annual quoted rate before compounding. Use negative for costs if needed.
Select how often interest is compounded.
Applied linearly against the nominal before compounding to approximate impact of annual fees.
Used when Daily is selected. For other frequencies, the selected m is used.
Annual Equivalent Rate
—
m = —
Effective growth of 1.00 over one year: —
Formula used

The Annual Equivalent Rate (AER) converts a nominal annual rate with compounding into a single-year effective rate:

AER = (1 + r_nom / m)m − 1

Where r_nom is the nominal rate (decimal) after deducting any annual fee proportion f:

r_nom = (r_quoted − f)

If daily compounding is selected, m is set to the chosen day-count basis (365 or 360). Growth multiplier over one year is (1 + r_nom / m)m.

Note: Fees and taxes in practice may apply differently. This calculator approximates fee impact by reducing the quoted nominal rate before compounding.

AER vs. Compounding Frequency Based on current inputs
Example data Editable table
Nominal % m per year AER % Growth (×)

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Important Note: All the Calculators listed in this site are for educational purpose only and we do not guarentee the accuracy of results. Please do consult with other sources as well.