Calculate CD Rates

When people invest in certificates of deposit (CD), one of the first things they want to find out is on how much they are going to earn from the investment. To help them find out, they need to arm themselves with knowledge on how to calculate for the earnings that they can expect using the tools that they would be provided with, which include the interest rates that would be offered on their CD investments. Among these rates, two of the most important are the Annual Percentage Yield (APY) and the Annual Percentage Rate. This is because these are the tools that can help investors to accurately calculate or compute for the earnings that they can expect to gain from the CD investments that they are about to make.

The APY

The APY is used to compute for the expected earnings from a CD investment wherein the investor decided to have the interest compounded until the CD reaches its maturity. However, investors do not necessarily have to invest in a bank that offers a higher APY. This is because the frequency by which a bank would compound the interest can determine the amount of earnings that an investor gets. Given this, it would be a good idea to invest in a CD that has an interest that is compounded daily, as these can provide very high returns.

The APR

The APR is used for calculating the expected earnings from CD investments wherein the investor opted to get monthly interest payments. However, in the same way that people should not always go for the CD provider that offers the higher APY, investors should also do the same thing with APR's. This is because the frequency by which a bank would compound the interest to determine how much an investor earns every month also determines the amount of earnings an investor gets.

One of the first questions that investors ask when they invest in a CD is how much earnings they can expect from a certain investment. Answering this question requires that investors learn how to compute for the earnings they can get using the tools that they would be provided with, which include the interest rates that are offered for various CD products. This is very important because the right information on these tools can help investors make the right decision with regard to investing in CD?s, which would not be solely based on the rate but also on other important factors as well.

CD Rates provides detailed information on Best CD Rates, CD Rate Calculators, CD Rate Comparisons, Certificate Of Deposit Maturation and more. CD Rates is affiliated with Cash For Future Payments.

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.