It should be noted that the effective annual rate on a bank deposit is always equal to or greater than the nominal rate on the deposit. Therefore, it is true.
The effective interest rate is the interest rate on a loan restated from the nominal interest rate and it is expressed as the equivalent interest rate when compound interest was payable annually in arrears.
As a result of compounding, the effective annual rate on a bank deposit (or a loan) is always equal to or greater than the nominal rate on the deposit.
Learn more about annual rate on:
https://brainly.com/question/15728540
