The compound interest rate lenders charge is usually expressed as an annual percentage rate (APR). So you may pay interest on your interest if you carry a balance from month to month. Most lenders and credit card providers charge compound interest. A savings account’s compound interest rate is typically expressed as an annual percentage yield (APY).Ĭompound interest can also work against you when you have to pay it. But depending on your balance and interest rate, the difference between daily and monthly compounding might only be a matter of pennies. The more frequently a bank compounds your interest, the faster your money will grow. Many banks compound interest daily, but some compound it weekly, monthly or even quarterly. Different banks add-or compound-interest at different rates, known as the compounding frequency. This allows your interest to accrue interest itself. With savings accounts, compound interest works by continually adding interest you earn to the funds you’ve deposited. How often does the bank compound interest? How long do you intend to let your savings grow? How frequently will you make regular contributions? How much will you deposit on a recurring basis?
How much will you deposit when you open the account? To use the compound interest calculator, enter the following information and select Calculate. How to Use the Compound Interest Calculator
