Definitions for "Effective annual yield"
In a deferred annuity, the rate used after the daily compounding and crediting of the annuityâ€(tm)s interest. The effective annual yield includes any first-year bonus and can be calculated as follows: using the rate bonus, a bonus paid on the base rate by some annuities (e.g., with a 6 percent base rate and a 1 percent first-year bonus, the effective annual yield will be 7 percent), and using the premium bonus, paid upfront by some annuities (e.g., with a 6 percent base rate and a 1 percent premium bonus, the effective annual yield might be 7.06 percent).
A seldom-used expression to refer to the yield on an investment expressed on a compound interest basis.
Calculated as (1+i/n)n, where i is the stated annual interest rate and n is the number of compounding periods per year. (Contrast with bond equivalent yield and money market yield.)
Effective call price Effective convexity
Effective call price Effective debt