How can they be the same? what happens in this situation?
2006-12-04 02:50:51 · 3 answers · asked by Sara S 4 in Business & Finance ➔ Personal Finance
what does 'interest compounded annualy" mean? You can't get a monthly interest check? you can only get it annually?
2006-12-04 02:57:50 · update #1
Compounded annually means just that - annually, once a year therefore: the APY & % rate are equal.
As many savings plans are done monthly, you should switch to one of those as then you will get extra earnings on the % payments that go in each month & build up your balance. (IF you leave the % payments in, do not withdraw them)
2006-12-04 03:01:49 · answer #1 · answered by kate 7 · 0⤊ 0⤋
Generally interest on most bank accounts is credited monthly. The interest rate is the rate used when calculating how much should be credited each month. The APY includes the interest that you would earn on the previous interest if you don't touch any of the money and make no additions.
When listed on a rate sheet, if the interest rate and the APY are the same, that means that the additional amount is negligible. You'll mostly see this on low interest accounts where the rate is something like .04%.
2006-12-05 18:24:01 · answer #2 · answered by tisbod5 4 · 0⤊ 0⤋
The interest is compounded annually
compounded annually means that any interest you earn is added to the account balance at the end of the year.
if interest is compounded daily, the interest you earn is added to the balance each day.
the more often the interest is compounded the higher the apy for a given interest rate.
2006-12-04 02:53:09 · answer #3 · answered by Anonymous · 0⤊ 0⤋