Yes. Under the Truth in Savings rules (Regulation DD), the annual percentage yield (APY) is a percentage rate that reflects the total interest paid on an account based on both the interest rate and how often that interest is compounded over a 365-day period. The separate “interest rate” disclosure is the annual rate that does not reflect compounding.
Because APY folds compounding into one comparable figure, two accounts with the same stated interest rate can show different APYs if they compound on different schedules. APY does not include bonuses or other non-interest rewards; it assumes the funds stay deposited for the period used in the calculation.
Image: Front cover of Post Office Savings Bank deposit book (1869), UK General Post Office, public domain, via Wikimedia Commons.
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