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Yield note 2

Daily, monthly or yearly compounding in plain words

Compounding is interest on interest. How often it is credited changes the APY even when the nominal rate looks the same.

Reading 1

A simple picture

If interest is added monthly, next month’s interest can include prior interest.

Reading 2

Comparing offers

When APYs are disclosed, you do not have to recompute compounding yourself.

Reading 3

Watch the fees

Maintenance fees can outweigh a modest APY edge.

Reading 4

Educational examples

Any numbers in our notes are illustrations, not current offers.

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