In deposit terminology, the term APR refers to the Annual Percentage Rate or the interest rate return on a deposit or cost of a loan that would be seen over an entire year. The APR on a deposit or loan contrasts with a monthly interest rate or a fee charged on a loan, mortgage or credit card
For example, the APR can be either the “nominal” APR, which refers to the basic interest rate over the period of a year, or the “effective” APR, which includes the compounded interest and whatever fees are charged. To calculate the nominal APR, you would multiply the periodic interest rate by the amount of interest payment periods over the course of a year. Calculating the effective APR is a bit more complicated. Because of how different jurisdictions classify fees and other costs, the effective APR varies widely from one place to another. The term “APR” has legal connotations, and lenders in the United States and the United Kingdom are required by law to disclose the APR on a loan before finalizing it.