How interest is paid in a savings account

[and_woox]

I was searching on how interest is paid in this case(every day, once a month), but to no avail.
Do you know how it is paid in a savings account?
Thank you

[nextel500]

It depends what kind of savings account. I have an American Express FSB savings account and they pay monthly.

[skydivingchic]

It will depend on the savings account and it should be stated in the terms of the individual account. Most (if not all) savings accounts I've had calculate the interest earned daily and credit it monthly.

[and_woox]

Thanks for the replies.
So is a savings account a good way to beat inflation?

[cooliemae]

Again, it really depends.

Inflation right now is about 4.5%, so a savings account (even a high yield account) is probably going to fall short of 4.5%.

CD's pay a little higher than savings accounts do, but still they're probably not going to get more than 4.5% and the your money is somewhat locked in.

If you are looking for longer term savings that will take into account inflation, then you might look at inflation adjusted bonds (i.e. TIPS and I-Bonds). Visit TreasuryDirect for more information. But you have to look beyond the inflation adjustment at the core rate and see if the bond is worth it (i.e. right now I-bonds are going for about 4.5% a year, but that rate will change semi-annually and the core rate is 0%) So if you buy the bond you will only keep up with inflation.

[maat55]

Originally Posted by and_woox

I was searching on how interest is paid in this case(every day, once a month), but to no avail.
Do you know how it is paid in a savings account?
Thank you

Mine is paid one the first of the month. My account is with provident direct.

[toptaxguy]

If the return after tax on your savings is higher that the rate of inflation you are winning.

[Aleta]

Mine is compounded daily and paid monthly.

[and_woox]

Is there anything that i should take into consideration apart from the interest % on a savings account?(hiden fees, operation conditions...)?

[Aleta]

I like to look at the APR instead of the APY. The APR is what I'm going to get daily compounded. The APY is for you having the money in the account for one year.

See how long the float time is. How many days will it take you to have the money transferred to an external account. Some accounts take 3 days. Your money will show a withdrawal date of one particular date i.e. July 7th , but it doesn't reach your account until July 10th. Meanwhile, you have lost 3 days interest. Some people like the ING Direct account because of the availability of the money going into your bank at a faster rate.

I would also look to see if they have POD )Pay-on-death) add-ons that will pay your designated people in case something happened to you. I just recently switched from one bank because they didn't have that option.

Also, check out how many withdrawals you can have in a given time and how often your interest will be paid.

[OverSaver]

I don't think any type of savings account will be able to beat inflation but you could look into a tax free savings account.

[noppenbd]

Originally Posted by and_woox

Is there anything that i should take into consideration apart from the interest % on a savings account?(hiden fees, operation conditions...)?

Check to make sure there is not a minimum amount to earn the stated interest rate.

[Aleta]

I saw one savings account recently that compounded daily but paid you quarterly. That was how the original savingi accounts were years ago. I would rather have one that pays monthly.