What percent am I getting each month in interest for my online banking account?
SF Giants Fan Forever asked:
I have an online banking account that recieves 5% APY and the Interest rate is 4.89%.
This entry was posted
on Monday, May 18th, 2009 at 12:00 am and is filed under Investing.
You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
I have an online banking account that recieves 5% APY and the Interest rate is 4.89%.
What exactly is APY, and what is the 5% used for. What is the interest rate per month? Do you just divide 4.89% by 12?
May 18th, 2009 at 10:54 pm
Basically, yes - you are getting about 0.4% per month
May 22nd, 2009 at 6:57 am
The APY is your Annual Percentage Yeild. The 5% means that you would earn 5% on your money annually. The interest compounds. So if you put in $1,000 on January 1st you would earn $50 of interest on that $1,000 for the year. The 4.89% is your effective interest rate. Since interest compounds you earn interest on your interest. You earn that 4.89% on your interest as well. Thats how the 5% and 4.89% come into play.