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09-08-2010, 09:52 AM
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Interest Rate Question
For my tax-free savings account @ CIBC the only interest information I can find is that it's 1.25% and the following:
"Interest is calculated on the full daily closing balance and is paid monthly. The interest rate quoted is an annual rate." I know what compound interest is, just used to seeing it labelled "compounded annual/monthy" etc. The wording there has me a bit confused. Can somebody please translate for me?  
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09-08-2010, 10:02 AM
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interest is compounded daily
Quote:
Quote:
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09-08-2010, 10:10 AM
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Great; Thank you!
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09-08-2010, 11:45 AM
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Just to be clear, it will be compounded daily - but will take 1 year to earn 1.25% total. It is not 1.25% each day. (It'd actually be about 0.00345%/day - which after 1 year of compounding would make a total of 1.25%)
I know a lot of people who make that mistake, so just checking that it's clear.
__________________
-JPG `It is more blessed to give than to receive.' Acts 20:35b
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