|
» Definitions |
| Initial deposit |
The starting balance for your CD. |
| Months |
The total number of months for this
CD to mature. |
| Interest rate |
The published interest rate for this
CD. Make sure to enter the actual interest rate, not
the Annual Percentage Yield (APY). |
| Annual percentage yield (APY) |
This is the effective annual interest
rate earned for this CD. A CD's APY depends on the
frequency of compounding and the interest rate. Since
APY measures your actual interest earned per year, you
can use it to compare CD's of different interest rates
and compounding frequencies. |
| Compounding |
This is the frequency that your CD's
interest is added to your account. The more frequently
this occurs, the sooner your accumulated interest
income will generate additional interest. You may wish
to check with your financial institution to find out
how often interest is being compounded on your
particular CD. |
