2006-08-15 11:15:07 · 5 answers · asked by to2006 1 in Business & Finance ➔ Investing
it is an annual rate. But 5% is not bad it is free money the only way to do better would be to buy stocks but then you are risking losing it.
2006-08-15 11:22:05 · answer #1 · answered by Generation268 3 · 1⤊ 0⤋
Like many have said, it is an annual rate. Daily you would receive1/360ths of 5 percent. However no one has explained how the account works. Essential you give your money to whomever and tell them to put it in a money market account. They turn around and use your money, along with thousands of other dollars that people gave them during that week, and buy a Jumbo CD. Since everyone's money is being pooled together, you can earn more collectively than you can individually, is the theory. Perks to a money market account include being able to withdraw money when you want, however there is usually a minimum of 1000 dollars for the better accounts. Also rates usually stay in the high 4 percents for a good one, it would be tough to get a 5 percenter.
2006-08-17 07:54:43 · answer #2 · answered by Joseph H 3 · 0⤊ 0⤋
APR = Annual Percentage Rate; therefore, you'll make 5% per year on the average daily balance of your account. They may compund monthly or quarterly and pay out, so you'll get a few dollars every few months if you keep the $500 in the account.
2006-08-15 11:22:47 · answer #3 · answered by Cool-K 3 · 1⤊ 0⤋
No, the rate you get is annualized. So you will get $25 for the whole year.
Same thing with CDS (and other investment products). A 1-year CD today yield roughly 5.25%. It is annualized. If you put $10,000, you will get $525 at the end of the year, so your total will $10,525 by the time the CD matures.
2006-08-15 11:20:23 · answer #4 · answered by EDDie 5 · 1⤊ 0⤋
No, that would be 5% per year!
2006-08-15 11:23:14 · answer #5 · answered by Anonymous · 1⤊ 1⤋