What is considered accurate for the APY and APYE calculations?

The correct answer states that the calculations for Annual Percentage Yield (APY) and Annual Percentage Yield Earned (APYE) must not deviate by more than one-twentieth of one percent above or below the actual yield. This precision is crucial to ensure that financial institutions provide accurate and trustworthy information to consumers about the returns they can expect on their deposits. The TISA emphasizes transparency and requires that any advertising of these rates reflect an accurate estimate of the rates offered, enabling consumers to make informed decisions.

Maintaining such a narrow margin helps to reduce confusion and potential discrepancies that could mislead customers regarding their earnings through interest over time. Therefore, when financial institutions calculate the APY and APYE, adhering to this strict standard ensures that individuals can reliably compare different savings options and understand how much they might earn based on the specific details of their accounts.

In contrast, the other options present varying standards that are either too broad or not reflective of the guidelines established under TISA, which emphasizes accuracy and certainty in financial disclosures.