Banky team Reviewed editorial answerشهادة بتعلن عائد كبير بيتصرف في آخر المدة، وتانية بتعلن سعر سنوي أقل؛ إزاي أقرا الرقمين.
Not before the basis is put on the same footing. An annual rate says how much per year, while an 'at maturity' figure on a multi-year product may be the total for the whole term.
Hypothetical example per 100 pounds: a certificate running 3 years, whose total return of 60% is paid at the end, gives 60 pounds after 3 years. Dividing simply gives 20 a year. Working out the annual rate that, compounded yearly, reaches the same 60 gives about 16.96% a year. So one total has more than one annual reading, and which one describes the product depends on its terms.
That is why comparing a 60% total with a hypothetical annual rate such as 22% is wrong, and so is comparing a 3-year total with a 1-year total. A fair comparison is between products with the same term and the same amount, on the return actually paid.
Ask the bank, or check the key-facts statement: is this figure annual or for the whole term? Does the return compound? And what is the effective annual rate banks are required to publish for the product?