Annual percentage yield is a great tool for comparing bank savings products and evaluating how much your deposit earns.  APY measures the rate of return annually and takes compounding into account.  For bank products like high yielding CDs, the APY measures the interest rate and how quickly that interest is paid.  Shorter compounding periods leads to a higher APY because the interest payment is credited to the certificate of deposit more quickly and it starts earning interest along with the invested principal.

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