Interest Rate Question

[greenmachine]

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?

[jIM_Ohio]

interest is compounded daily

Interest is calculated on the full daily closing balance

and deposited to account monthly

paid monthly

[greenmachine]

Great; Thank you!

[jpg7n16]

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.