AER Practice Note

Source
https://www.ukfinance.org.uk/system/files/2025-02/Annual%20Equivalent%20Rate%20AER%20practice%20note_0.pdf
Type
pdf
First captured
2026-03-13 18:56 UTC
Last checked
2026-03-13 18:56 UTC
Content hash
sha256:104e05cfb2320c168537a53b039264fa9c0d36be94e46eda109332d38764b453

Contents

PageSectionLines
Page 11–46
1. The terms of this Practice Note apply to the advertising of all interest bearing accounts
2. Where interest rates are advertised, these must be described as follows:
Page 247–100
Section 7) to advertisements.
Page 3101–148
3. Advertisements which quote a rate of interest must quote the AER and either the Gross
4. Advertisements which quote a rate of interest must contain the following specific
Page 4149–196
5. Advertisements which quote a rate of interest must clearly explain in the main part of the
6. Advertisements which quote a rate of interest must clearly explain the following in the
Page 5197–245
7. A general notice to customers of rates need only comply with Sections 2 and 3 above In
Page 6246–303
Page 7304–363
Page 8364–411
Page 9412–464
1. If an account pays or credits interest once a year, then the AER is equal to the
Page 10465–521
2. If an account pays interest at intervals greater than 1 year, the AER is the rate
3. Now suppose a deposit of £100 is to be made at the beginning of the first year
Page 11522–587
4. If in the above example there were not an additional deposit contracted in the
5. If an account pays interest more often than once a year, then the AER is
6. A short-term bond, for example an 8-month bond paying 5.5% per annum, has to
Page 12588–652
7. Unconditional bonuses, for example a launch bonus of 0.5% paid at least until 30
Page 13653–710
8. Finally, consider a hypothetical product with irregular (but committed) cash flows.
Page 14711–771
Page 15772–819
Page 16820–871
1. To ensure that AER properly reflects a lower cash holding rate prior to investment
2. To extend the period before advertising needs to be updated with a new recalculated
AER AER
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AER AER
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Page 18922–969
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Page 201018–1017
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