When is interest get paid on savings?
[Re-Titled by Moderator]
Interest on Apple Savings account compounds daily and is paid monthly.
4.07% APR, 4.15% APY Interest rates are not guaranteed and are subject to change.
Interest on Apple Savings account compounds daily and is paid monthly.
4.07% APR, 4.15% APY Interest rates are not guaranteed and are subject to change.
What is paid varies by the number of days in a month. Each month the amount of interest paid is different because number of days vary. Compounded daily means you earned interest that day, but the bank didn’t deposit the funds. The next day you earn interest on the balance and prior days earned interest. At end of month the interest earned every day that month, is paid into the account.
OK; Thank you again. Using $36,000 as the principal amount in this calculator, what would the monthly (not annual) interest payment be on the first month? Apple Savings pays interest at the end of each month so that's what I'm trying to get at.
I tried to find out yesterday how the monthly interest payment (4.5% APY) is calculated and spent 20 frustrating minutes on the telephone with various (equally frustrated) Apple support personnel who were not privy to what I thought was a pretty basic piece of information. When I calculate the amount of APY, compounded daily, split into 12 payments (one per month), I get a value of about $135 but Apple pays out at about $125. Not a big difference, obviously (8%), but there shouldn't be even this big a difference - and, no, the number of days in the month used in the calculation matters almost not at all. I also asked a friend in the banking industry to double-check my math and he got a similar result as me. Just asking for the formula.
The difference is between APR and APY, Rate vs Yield. You’re using APY, that’s what you earn over the rate by daily interest being compounded. You should have used the APR for the daily interest. When the interest is compounded daily, the yield is what you gain at the end of the year. Please see my example below.
You might also find this online calculator informative as it also provides the formulae being used.
FYI: It calculates $120.63 for the 1st month in your $36k principal example. (Assuming a 4.07% APR, a 30-day month, and a 365-day year)
Thank you; what is the app that you are showing a screen shot of in your reply?
You’re welcome! A compound interest calculator available in the App Store.
https://apps.apple.com/us/app/ez-financial-calculators/id494170744
When does interest get paid on Apple Card savings?
