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Difference Between Rates And Apys

Sunday, September 15, 2013 - 8:53 AMChase Manhattan Bank - Details
Can anyone explain to me why certain banks have different Rates and APYs for deposits?  For example, why would a bank like Chase give a 4.88% Rate with a 5.00% APY on a deposit and yet another bank might have 4.98% versus 5.00%?  I read the info that one of the financial writers on DA gave about this subject but it did not answer this particular question.  I get our interest checks sent to our bank or mailed to us either monthly, quarterly or whenever it is available. Their  Rate or APY stays the same no matter when the interest is posted and sent.  There is usually only about 2 points difference between the Rate and the APY with all my other banks except Chase. For example:  1.98% Rate versus 2.00% APY etc.  Before I ask Chase about this, I thought I would see if I could get some info to understand it better.  Thanks.
paoli2paoli21,406 posts since
Aug 10, 2011
Rep Points: 6,152
1. Sunday, September 15, 2013 - 9:49 AM
I have some explanation which may help clarifying things in this 2011 blog post.
Ken TuminKen Tumin5,472 posts since
Nov 29, 2009
Rep Points: 125,708
2. Sunday, September 15, 2013 - 10:15 AM
Thanks for the additional help, Ken.  I did notice that the larger differences between Rates/APY are on CDs which had the higher interest rates as the article points out.  Unfortunately, they are maturing soon.  Much appreciation for the info.
paoli2paoli21,406 posts since
Aug 10, 2011
Rep Points: 6,152