You may notice if you’re shopping for a savings account that banks advertise both an interest rate and an annual percentage rate, or APY.

APY, or annual percentage yield, is an essential factor when choosing a savings account, as it considers compound interest and helps maximize your savings over time.

There are two interest rates posted with nearly every interest-bearing instrument: interest rate and annual percentage yield (APY). APY is the most important to you as an investor. Here’s why.

Learn how to find the average savings account interest rate, how that differs from the highest rates and what factors impact your balance earnings.