AER, gross and bonus rates explained
Facts checked 30 October 2026
AER, the annual equivalent rate, shows what you would earn in a year if interest were paid once at the end of it. It lets you compare accounts that pay interest monthly with ones that pay yearly.
AER and gross rate
The gross rate is the contractual rate before tax. When interest is paid monthly, the AER is a little higher than the gross rate because each month's interest earns interest. We rank by AER.
Bonus rates
Many easy access accounts include a bonus for the first year or so. When it ends, the rate drops, often sharply, and the bank is not obliged to tell you more than its terms require. We show the rate after the bonus beside every bonus account, and on each account page you can add a calendar reminder for two weeks before it ends.
How we turn a rate into pounds
Because the AER already includes compounding, interest over a period of months is the amount × ((1 + AER)months/12 − 1). For example, £10,000 at 4.50% AER for a year earns 10,000 × 0.045 = £450.00. Where a bonus ends inside the period, we switch to the lower rate when it ends. All figures are before tax.
This guide explains how things work. It isn't personal advice; if you're unsure what suits you, speak to a regulated financial adviser.