investing in certificate of deposits what's the difference between capitalized inter est and compound interes

Question

bank seems to dance around the question

Answer 1

Nothing.

Answer 2

the two rates that they give you are based on the fact that interest compounds. if the cd is for less than 1 year, you would need to roll it over again into another cd at the same to earn the higher amount. thus earning compounding interest. if the cd is one year, the two amounts should be very close to the same.