The annual percentage yield (APY) is the effective rate of interest that must be disclosed to customers by banks on their savings products as a result of "truth in savings laws."

Question

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This statement is true. Truth in savings laws require banks to disclose the APY to customers on their savings accounts and other savings products. The APY takes into account the compounding of interest and reflects the true annual rate of return on the account.

The Annual Percentage Yield (APY) Is the Effective Rate of Interest