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DepositAccounts.com Article: Understanding Interest Rate and APY

Tuesday, March 9, 2010 - 9:45 AM
While I focus on deals, we're going to continue to have others write articles on timeless banking topics. I'll be reviewing them before publication. The latest one was written by Debbie, and it's on Understanding Interest Rate and APY. Even if you're familiar with compounding and APY, you may be interested in the discussion of blended APY. If you have a reward checking account and keep your balance above the main tier, you will be receiving a blended APY.
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Ken TuminKen Tumin5,472 posts since
Nov 29, 2009
Rep Points: 125,708
1. Tuesday, March 9, 2010 - 12:35 PM
A great article on explaining interest rates.

I retired a few years ago but I remember in the 80's when interest rates were changing several times a day, a law or regulation was passed that required a bank employee to always  quote the APY first for savings, checking and certificates of deposit.

We did not have to quote the rate or how it was compounded but if we did we still had to quote the APY FIRST . ALWAYS---

THE APY IS THE ONLY THING THAT REALLY MATTERS BECAUSE THAT IS FIGURE THAT WILL TELL YOU HOW MUCH YOU WILL GET AT THE END OF ONE YEAR AND IT MADE IT EASY TO COMPARE FIGURES WITH OTHER INSTITUTIONS.  Wonder if that law or regulation still exists?  A few of us retirees still remember it well. If we did not state the APY first the bank could be fined and we were told we would be fired.
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Ally6770Ally6770941 posts since
Jan 16, 2010
Rep Points: 2,739
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