Can anybody explain a CD account?

Question

I opened a CD recently and it said I had an interest rate of 5.21%. The CD last for 11 months and I have a thousand dollars in it. Can you explain how the interest works and also explain the apy?

Answer 1

you will get interest added on usually every 3 months & will be compounded. that is what give you APY. at end of 11 mo. you will be sent a notice it is due & you can go in& get all your money, or collect the interest,or leave it renew for same rate & not have to change anything. APY is higher because you get interest on the acumulated interst each period

Answer 2

You need to check the paperwork you signed. It will tell you how the interest is accrued. Compounding may be, quarterly or even daily. The APY is annual percentage rate, any interest accrued if not withdrawn will also accrue interest. The total interest accrued over the life of the account is then used to calculate the APY and will be slightly higher than 5.21% but not significantly higher.

Answer 3

A certificate of deposit is a promissory note issued by a bank. It is a time deposit that restricts holders from withdrawing funds on demand. Although it is still possible to withdraw the money, this action will often incur a penalty.

For example, let's say that you purchase a $10,000 CD with an interest rate of 5% compounded annually and a term of one year. At year's end, the CD will have grown to $10,500 ($10,000 * 1.05).

CDs of less than $100,000 are called "small CDs"; CDs for more than $100,000 are called "large CDs" or "jumbo CDs". Almost all large CDs, as well as some small CDs, are negotiable.

Answer 4

each and every time somebody downloads a track or a action picture from an unlawful (many times loose) website, the action picture businesses and track businesses lose money. they do no longer desire to maintain dropping their earnings..