What kind of compounding do online banks use?

[JPWRana]

ING, Emigrant Direct, and HSBC?

Is it daily, monthly, yearly, etc?

because 3.8% to 4.0% to 4.25% are different when they are each compounded differently.

I'm debating which of the 3 to START online baking at?

I would start off with putting about $3k.

[Optsol]

Each has different compound rates, but that doesn't really matter. The rates they dangle in front of you are the APY rates, which account for their individual methods.

For example,

HSBC is daily, 4.17%, which turns into 4.25APY
Emigrant is daily 3.92%, which turns into 4.00APY% etc...

[JPWRana]

so then they compound daily? all 3 online banks?

[sweeps]

HSBC: Monthly
ED: Daily
ING: Monthly

[Optsol]

Some online banks compound monthly. I have no idea what ING does.

The point is that it does not matter. The 3.8%, 4.0%, and 4.25% are all annualized per year extrapolations of the individual compounding methods.

All of that aside, I'd rather give my money to charity then let a foreign bank make money off of it, so HSBC is out of the running for me.

For your own comparison....
http://www.bankrate.com/brm/rate/mmm...ct=33&sor t=2

There are plenty of 4+% APY options.

[JPWRana]

thanks!

From the previous 19-page long ING v. ED thread (which i've only read 11 of the 19 pgs worth of posts)...

it appears ING has the better user interface and customer support, but at the cost of less APY

AND

Emigrant Direct has a POOR customer support but FASTER transaction times and higher APY.

Now I just need to find out how HSBC is. Do we have a thread about HSBC user experiences here in the forums?

btw, Opstol, THANX A MILLION FOR THAT!! that's real useful. I didnt know there was 2 online banks located 20 minutes from where I work, and have higher APY than HSBC!!!

I'll look into them.

[Optsol]

np, that's what we're all here for, helping out in any small way. g/l

[JPWRana]

btw, whats with the "Points"? Can you actually get/buy tangible/concrete things with that?

[Ima saver]

Thanks for the site Optsol. Since I can get 4.14 right here at home, it doesn't seem worth moving into the other banks. I do not want my money going to a foreign banks either.

[Optsol]

Originally Posted by JPWRana

btw, whats with the "Points"? Can you actually get/buy tangible/concrete things with that?

Not sure. I'm the new guy around here.

[Ima saver]

Go to general discusssion. It will discuss the points there. They are only used on this site.