I'm looking at different internet banking options and notice that some offer daily compounding, and some monthly. I just want to know if that should be an important factor in choosing a bank.
2006-09-20 08:54:30 · 7 answers · asked by ajl_6 1 in Business & Finance ➔ Personal Finance
Look for the APY on each account. The APY levels for daily, monthly etc. For a stated rate, monthly will always give a higher APY since the money is compounded daily.
2006-09-20 14:36:40 · answer #1 · answered by Anonymous · 0⤊ 0⤋
daily
no matter how much is in your account, daily is better
at the end of each day, your account is credited with interest. Therefore, on Monday for example, you receive interest on your account. Then on Tuesday, your money plus the interest you received yesterday again receives interest, etc.
Monthly, you only get credited with interest at the end of each month.
With the daily, your interest receives interest each day. With monthly, your interest gets credited at the end of the month and can not start compounding until the first of the next month.
Daily is the best.
2006-09-20 09:01:17 · answer #2 · answered by Jenny A 6 · 0⤊ 0⤋
Daily is better. You earn interest on your interest.
With a small amount in the account, you will not notice the difference though.
2006-09-20 08:57:24 · answer #3 · answered by Jordan K 3 · 0⤊ 0⤋
It relies upon on the pastime fee. All different issues (like the pastime fee) being equivalent, then on an usual basis is extra constructive. yet whilst the charges of pastime are diverse, all bets are off. The is why you are able to desire to easily learn the APY. The APY is in keeping with the two the pastime fee and the compounding era. in case you learn the APYs, then you definately are comparing apples to apples.
2016-10-17 08:33:59 · answer #4 · answered by goodknight 4 · 0⤊ 0⤋
Daily compounding is best. A penny earned is a penny earned.
http://search.yahoo.com/search?p=Benefits+of+Daily+Compound+interest++for+Savings+accounts&sp=1&fr2=sp-top&prssweb=Search&ei=UTF-8&fr=FP-pull-web-t&ei=UTF-8&SpellState=n-722418334_q-zVnsavSRycNdoH6HLJsx9wAAAA%40%40
2006-09-20 09:20:30 · answer #5 · answered by theoldfarmer 1 · 0⤊ 0⤋
If you are going to be maintaining a substantial monthly balance, then go for the monthly one, if not opt for the daily one.
2006-09-20 08:57:10 · answer #6 · answered by bostoncity_guy 2 · 0⤊ 1⤋
In order to compare them, you must convert them all to annual equivalent rates (AER). Ask the banks to give them to you. And be careful of special short term bonuses which are used to confuse the customers.
2006-09-20 12:12:21 · answer #7 · answered by Anonymous · 0⤊ 0⤋