answersLogoWhite

0

In short, stated rate does not include interest income made by (usually) monthly compounding of interest income. This means that if you multiply your initial investment by APY, you will get exactly the amount you will have after one year, provided you did not add or withdraw any funds. If you multiply your initial investment by Stated Rate you will get amount lower that what you would be able to withdraw after twelve months.

User Avatar

Wiki User

17y ago

What else can I help you with?

Related Questions

What is the difference between APY and interest rate?

The difference between APY and interest rate is that APY (Annual Percentage Yield) takes into account compound interest, while the interest rate does not. APY reflects the total amount of interest earned on an investment or savings account over a year, including the effect of compounding.


Can you explain the difference between APR and APY in terms of calculating interest rates?

APR (Annual Percentage Rate) is the annual rate charged for borrowing or earned through an investment, while APY (Annual Percentage Yield) takes compounding into account. APR does not consider compounding, while APY reflects the effect of compounding on the interest rate.


What are the checking account interest rates?

The interest rates on checking accounts vary depending on the bank who issues them. At the present time, the interest rates can range from 0.20% APY to 0.93% APY, depending on which bank you choose.


What are the current CD APY rates available?

The current CD APY rates vary depending on the bank and the term length of the CD. It is recommended to check with individual banks or financial institutions for the most up-to-date rates.


Where can you find a few of the best money market rates available?

Currently, here are some of the top highest rates for money market accounts: Capital One (1.10% APY); Ally (1.04% APY); Discover (1.15% APY); and Flagstar Direct (1.11% APY). Some of these may have minimum deposit and/or minimum balance requirements. Also keep in mind that bank rates can and do change often.


What are the lowest cd interest rates in the country right now?

Right now one of the lowest rates in 0.50 APY.


What are the current money market accounts rates?

The rates are pretty awful. According to bankrate.com, rates range from 0.8% - 1.1% APY depending on how much is in your account.


What is the difference between a coupon and APY on a CD?

A coupon is a fixed interest rate paid periodically on a bond, while APY (Annual Percentage Yield) on a CD (Certificate of Deposit) is the total interest earned over a year, including compounding.


Which banks pay the highest cd rates in Georgia?

Montgomery Bank & Trust seems to have the best CD rates in Georgia with a 2.28% APY.


What are the current saver rates for savings accounts at your financial institution?

The current saver rates for savings accounts at our financial institution are 0.75 APY.


CD rates at charter one bank-rolling meadows, IL?

3.9497% APY is one they offer


Where might one find top money market rates?

Ally Bank, Capital One, and EverBank offer some of the highest-yielding money market account options (between .75%-.86% APY). SmartyPig is a similar type of account, allowing users to earn 1% APY.