AER stands for Annual Equivalent Rate, which is a type of interest rate for savings accounts. It is the actual interest rate that an investor will earn for an investment, a loan, or another product, based on compounding. AER is calculated based on the interest and charges on a savings account across a 12-month period. It is a more accurate representation of the returns of a loan or investment than the nominal interest rate, as it accounts for how interest is compounded. AER is commonly used to make comparisons on savings accounts, as it allows you to see how much interest you could earn over a full year. If the AER is variable, the amount of interest you’ll earn will change, either going up or down.

It is important to note that AER is not the only financial acronym used to calculate interest rates. Other similar ways of calculating interest include Effective Annual Rate (EAR) and Annual Percentage Yield (APY) .

In addition to its use in finance, the prefix "aer-" is also used in the English language to refer to air or atmosphere.