How can you explain the CD rate (Certificate Deposit )and APY rate( Annual Percentage Yield) in easy  way?
549854
the rate is the stated rate such as 4%.  The yield is higher rate because of compounding.  Let's say $100 @ 4% per year is $4.00 income. The same 4% rate compounded monthly is higher because the intrest income is added at the end of each month. Let's say $100 @ 4% monthly is 1st month is $100 x 4% = $4.00 / 12 months is $100.33 at the end of the first month so month 2 is $100.33 x 4% = / 12 months is $100.66. and so on...  So yield is interest on top of interest.
634438
It is a Certificate of Deposit. If you promise a bank they can use a lot of your money for a long time, they give you higher interest than passbook savings. They typically start out at $1,000 for 6 months and go up - $5,000, $10,000 and up; 12 months, 18 months, up to five years.\n\nYou pay a penalty if you take the money out early.\nAny bank, savings & loan or credit union will have them; walk in and ask.\n\nThe most painless way to save is to have the bank transfer 10% of your paycheck (5%, 20% . . .) to your savings account each payday, automatically. If you never see it, the chance of spending it is less. When you get enough in your passbook savings to buy a CD, buy one. Leave some cash in the passbook just in case.
242661
Annual Percentage Rate .\n\nA yearly rate of interest that includes fees and costs paid to acquire the loan. Lenders are required by law to disclose the APR. The rate is calculated in a standard way, taking the average compound interest rate over the term of the loan, so borrowers can compare loans. In mortgages, it is the interest rate of a mortgage when taking into account the interest, mortgage insurance, and certain closing costs including points paid at closing. ...
179278
Whenever a bank quotes a rate it is by law quoted as APY. They can't quote it any other way. I believe federal banking regulation D states that. Sorry if I'm wrong on which reg it is. Anyways. .1% is exactly that on tenth of a percent Annual percentage yield. What they mean when they say paid daily is that if you go in a close your account today and you opened it 21 days ago you will get paid interest for 21 days. Most banks only pay out interest monthly or in quarters and if you were to close your account on any day other than the payout day you would lose any accrued interest from last payout.
105198
CD=Certificate of Deposit.  I suppose savings and loans and credit unions issue them as well as banks.  In the old days you committed your money for a certain number of months or years and paid a penalty for cashing out early--the penalty being set by the bank and spelled out in the contract.  Now my little local bank offers a CD with a term of one month or so that can be cashed out in 7 days without penalty.  I bought one to park some money while a check cleared and earned 3.5% interest.  I thought it was a good deal with minimal hassle and no fees.
1148875
The *right* way to figure this out is to use an algebraic\nformula, but I think it's easier to visualize if you use a\nspreadsheet.\n\nIt's slightly difficult to present a table in Yahoo Answers\nbecause everything is jammed hard against the left\nmargin.  [I'm not sure why that's a feature.]  To help\nreduce the column misalignment, I displayed all of the\nnumbers with a constant width (ie. with leading zeros\nwhen necessary).  Bottom line is that you'd have\n$30344.87 at the end of eleven years.\n\nYear == years since start of account (in half year increments)\nRate == interest rate\nBalance == running balance of account\nInterest == interest payment for previous 6 months\n\n\nYear    Deposit     Rate   Balance  Interest\n\n00.00    820.00     0.000  00820.00   0000.00\n00.50    820.00     1.050  01681.00   0041.00\n01.00    820.00     1.050  02585.05   0084.05\n01.50    820.00     1.050  03534.30   0129.25\n02.00    820.00     1.050  04531.02   0176.72\n02.50    820.00     1.050  05577.57   0226.55\n03.00    820.00     1.050  06676.45   0278.88\n03.50    820.00     1.050  07830.27   0333.82\n04.00    820.00     1.050  09041.78   0391.51\n04.50    820.00     1.039  10214.41   0352.63\n05.00    820.00     1.039  11432.77   0398.36\n05.50    820.00     1.039  12698.65   0445.88\n06.00    820.00     1.039  14013.90   0495.25\n06.50    820.00     1.039  15380.44   0546.54\n07.00    820.00     1.039  16800.28   0599.84\n07.50    820.00     1.039  18275.49   0655.21\n08.00    820.00     1.039  19808.23   0712.74\n08.50    820.00     1.039  21400.76   0772.52\n09.00    820.00     1.039  23055.38   0834.63\n09.50    820.00     1.039  24774.54   0899.16\n10.00    820.00     1.039  26560.75   0966.21\n10.50    820.00     1.039  28416.62   1035.87\n11.00    820.00     1.039  30344.87   1108.25\n\nAdditional comment:\n\nOh man, I messed this up.  Thanks to "Mark Taranto"\nfor catching and correcting my mistake.  \n\nI took yet another look at this and want to\nwork through it carefully.  We appear to have\nas many different answers as there are people\nsubmitting solutions.\n\nOn day 1, Joanne put in $820, so that's her's balance.\n\nAfter 1/2 year, the bank would add half of 5% interest,\nwhich is 820*.025 = 20.50 and Joanne would add another \n$820.  So after six months, she would have:\n\n$820 + $20.50 + $820 = $1660.50\n\n\nAfter one year, the bank will again add half of 5% as\ninterest, which would be $1660.50 * 0.025 = $41.51.  \nThen Joanne would add $820, so the new total would be:\n\n$1660.50 + $41.51 + $820 = 2522.01\n\nContinuing this process in the spreadsheet, the\nfinal result after 11 years is:\n\n$23809.46\n\nThe corrected spreadsheet follows:\n\nYear  Deposit  Rate    Balance  Interest\n\n00.0  820.00  0.0000  00820.00  000.00 \n00.5  820.00  0.0250  01660.50  020.50\n01.0  820.00  0.0250  02522.01  041.51\n01.5  820.00  0.0250  03405.06  063.05\n02.0  820.00  0.0250  04310.19  085.13\n02.5  820.00  0.0250  05237.94  107.75\n03.0  820.00  0.0250  06188.89  130.95\n03.5  820.00  0.0250  07163.62  154.72\n04.0  820.00  0.0250  08162.71  179.09\n04.5  820.00  0.0250  09186.77  204.07\n05.0  820.00  0.0195  10185.92  179.14\n05.5  820.00  0.0195  11204.54  198.63\n06.0  820.00  0.0195  12243.03  218.49\n06.5  820.00  0.0195  13301.77  238.74\n07.0  820.00  0.0195  14381.15  259.38\n07.5  820.00  0.0195  15481.59  280.43\n08.0  820.00  0.0195  16603.48  301.89\n08.5  820.00  0.0195  17747.24  323.77\n09.0  820.00  0.0195  18913.31  346.07\n09.5  820.00  0.0195  20102.12  368.81\n10.0  820.00  0.0195  21314.12  391.99\n10.5  820.00  0.0195  22549.74  415.63\n11.0  820.00  0.0195  23809.46  439.72
477394
Rate is the discount rate over a period.\nThe range is probably the list of values representing the payments or income or whatever.\n\nIt's not supposed to be x-y.  It's normally something used in an Excel sheet, for example.  Rate would be a cell, and Range would a range of cells with the payments.  It just looks like a normal formula.  Something like =NPV(A1, A2:A100) + B1
139549
your rate is 2.25 plus the treasurey index at the time of your adjustment. (yearly, every six months, etc.) I am a mortgage broker if you need to refi email me, I can answer all your questions.
906041
It depends on the option you selected when you purchased the CD. Most banks give you the option to take the interest in your checking or savings account or to add it back into the CD. The APR quoted most likely assumes that the interest is being added back to the CD.
873237
well, you didn't mention the compounding factor, so....\n\nsimple interest\nA sub t is the value (amount) after "t" time\nP is the initial amount invested\nr is the interest rate\nt is time ( in years)\n\n    A sub t  = P ( 1 + r) ^ t\n\nfor compound interest rate\nn is the number of times that the interest is compounded per year\n\n    A sub t = P ( 1 + r/n) ^ (n*t)\n\n\nnow, you have another problem...\nsome CDs only pay interest yearly....\nsome quarterly, some monthly...\nsince your interest rate is different from your APR, \nI'll assume a monthly compounding\n\n     Amt = $2000 ( 1 + (.0489/12)) ^ (12* (11/12))\n\nnote: the  time is 11/12 because interest is figured on a yearly basis and 11 months is 11/12 of a year\n\n  if my calculator does not deceive me\nyou should get   $2091.50
1036940
If you dont plan on touching the money for a while, a CD would be good. They have interest rates around 4 percent.
430366
Compounding when interest builds on something. If interest is charged or paid monthly then the interest compounds monthly.\n\nAnnual % rate is the rate per year. In the example of having a certificate of deposit at a bank, it is the amount that the bank gives you if you were to get paid interest once a year. Generally that number is divided by 12 and paid monthly.\n\nAnnual % yeild is the annual % rate you get when you include the interest that you earn on your interest.
303707
A CD is a certified deposit.  An amount of money that is held for a specific amount of time that yields a return based on the amount and the time.  (Bigger amounts and longer periods tend to mean more interest)\n\nOnce you give them the money, you can't get it back until the maturity date unless you want to pay a penalty.\n\nEssentially, you guarantee that you'll leave that money where it is for a certain period of time in exchange for the interest.\n\nGood stuff: Fixed rates, decent returns, low maintenance.\n\nBad stuff: If the rates get better, too bad.  Can't access money without penalty.  Money tied up for specific periods of time.
874896
In layman's words, APR(annual percentage rate) is interest rate you will get on your money . Usually it is compounded monthly, so its kind of hard to calculate how much money you will earn over a bigger period of time, say a year.  APY (annual percentage yield) tells you upfront that if you put $X in account you will get X*APY/100 dollars as interest after a year.
246324
The simplest way is to multily by 12.  While that doesn't give the exact rate, it is generally close enough.  For deposits, (savings accounts or money markets) rates are usually expressed in APY (annual percentage yield).  So a money market paying 6% APY would have a 0.5% monthly yield, if interest is compounded monthly.\n\nFor loans, most lenders calculate interest by assuming that each month has 30 days and each year has 360 days.  That makes each month have the same interest.  To get the actual annual rate, you would divide the monthly rate by the number of days in the month (31 for march) and multiply by the number of days in the year (365).  But the result is so close that it's usually good enough to just multiply by 12.
651929
Loan amount = L\nInterest    = I\nTaxes       = X\nInsurance   = N\nTerm in Yrs = T\nPayment     = P\n\ntherefore: P = (((L * (I/12)) + L) /(T/12)) + X/12 + N/12
212176
It depends on how long you plan to have you money lock by the investment. \n\n(1) For long-term, I would suggest bonds. In the past, bonds offer better rate for long-term. (However, this is not true recently.)\n(2) For short-term, CD is easier to liquidate (or the penalty of getting out of it could be smaller).