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CD's annual yield

Is the annual yield still a good indicator of the best return on a CD?

Shopping CDs by the posted annual percentage yields, or APY, allows you to compare CDs with the same maturity date but with different ways of paying interest.

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The APY considers how often interest is paid on your investment. More frequent interest payments allow the interest to earn interest, raising the return on your investment. The table below shows how the APYs change with changes in how interest is paid.

The rates used for the comparisons are NOT actual rates offered today. They are simply examples. For today's rates, check here.



Deposit:
$10,000
 
$10,000
Term:
1 year
 
7 months
Nominal rate:
3.500%
 
2.500%
 
Yearly
3.500%
$350.00
 
2.500%
$145.08
Semiannually
3.531%
$353.06
 
2.516%
$145.98
Quarterly
3.546%
$354.62
 
2.524%
$146.44
Monthly
3.557%
$355.67
 
2.529%
$146.75
Weekly
3.561%
$356.08
 
2.531%
$146.86
Daily
3.562%
$356.18
 
2.531%
$147.00

Use Bankrate's CD calculator to find the APYs and interest paid on your CDs. You can shop CDs using Bankrate's Best Rates feature, and the APY is always provided.

While APY doesn't reflect the actual interest paid on the account, it is a good way to comparison shop between banks for CDs with the same maturity date.

 

Bankrate.com's corrections policy
-- Updated: Nov. 17, 2005
 
 
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