There are two types of return rates: nominal return rates and effective return rates (APY / annual percentage yield).

The difference is that nominal return rates do not take the compounding period into account, whilst effective return rates do. Hence effective return rates provide a much more accurate measure of return charges.

A statement that the "return rate is 10%" means that the return is 10% per year, compounded annually. In this case, the nominal annual return rate is 10%, and the effective annual return rate is also 10%. However, if compounding is more frequent than once per year, then the effective return rate will be greater than 10%. The more often compounding occurs, the higher the effective return rate.