Which account is best? IR/APY: 2.8%/3.75% or 3.25%/3.3%?

Question

Did I just make a mistake? I just moved all of my money from a savings account that pays 3.25% interest and 3.3% APY to a Money Market account that pays 2.8% interest and 3.75% APY.

The bank rep assured me it was better but I'm not sure if he said this just to make commission from me opening a new account.

Answer 1

The reason banks are required to report APY is so that you can compare apples to apples. The higher the APY, the better. So you did the right thing. Always compare APYs.

Comparing interest rates is tricky, because they are meaningless if you don't know the compounding period. And It takes a bit of math to compare interest rates once you do know the compounding period. This is math that is sadly beyond the average American.