AER means "Annual Equivalent Rate" and is the interest rate you would earn in a 12-month period if you put your money in an account at the beginning and left it there for a full 12 months without adding to it or taking away from it, other than the interest you receive.
The calculation of AER depends on the frequency with which interest is paid.
If the interest is paid once a year, the AER will equal the APR.
If the interest is paid monthly, however, then each month you will earn interest on a little more money (your initial deposit plus any accrued interest to date), so the AER will be higher than the APR.
APR means "Annual Percentage Rate" is designed to be a clear comparison tool between products. It includes all interest and any fees, so is the net effect of the product on your wealth.
For savings accounts, a higher APR means you earn more money.
Interest rate 'blending' is the term given to placing different sums in different accounts on different rates of interest to arrive at an overall, or 'blended' interest rate on the funds.
Compounding in interest is the effect of having a sum of money which earns interest over a period. Over the following period, the interest is earned on the original sum and the amount of interest earned so far.
The effect of compounding can be enormous, because of this notion of 'earning interest on interest'.
The power of compounding was called the eighth wonder of the world by Albert Einstein, or so the story goes. He also is rumoured to have said: "He who understands it, earns it. He who doesn't, pays it."
Liquidity in investment terms simply means 'how quickly you can turn your investments into cash'. The most liquid investment is cash itself (because it is already in cash).
