What is daily compounded interest?
Compound interest means that at the end of each day, 1/365th of the interest rate on your balance is calculated. So, on your $5000 deposit into a high-yield savings account at 5% APY, the bank calculates 1/365th of that 5% interest at $0.68 boosting your balance to $5000.68. The same happens the following day and so on adding on to your increased balance. The good news is – the bank is essentially paying you interest on money they’ve already paid you in interest. Over time, this can really add up. (What’s important to note is compound interest is often times credited to your savings account on a monthly basis. Are high-yield savings accounts a safe investment? Like traditional savings accounts, high-yield savings accounts are FDIC insured, unlike brokerage accounts and some money market deposit accounts. With a high-yield savings account you get a high rate of return, without sacrificing security. Also, with a high-yield savings account, you aren’t necessarily restricted to when you ca
