Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
How To Translate A 7 Day Yield Of Of 0.04% To A 1 Year Yield ?
Old 07-12-2016, 02:50 PM   #1
Recycles dryer sheets
ownyourfuture's Avatar
 
Join Date: Jun 2013
Posts: 284
How To Translate A 7 Day Yield Of Of 0.04% To A 1 Year Yield ?

In my IRA at Fidelity, the cash is kept in FIDELITY GOVERNMENT MONEY MARKET
SPAXX. As of a couple minutes ago, it lists a 7 day yield of 0.04%

Hypothetically, if you had $10,000.00 in that fund for one year, & the 7 day yield stayed at that 'exact' rate of 0.04% for the entire period, not counting the little bit of compounding, how much would you have ?

Thanks in advance!

PS: I was going to start a totally different thread on CD rates, but I figured since it was related to this subject, I'd just add it here.
I just opened a CD through Fidelity in my taxable brokerage account. It pays 0.50% for 3 months. Some people I've talked to seemed very leery, saying that doesn't seem possible because if you could get that every three months, it translates into 2.00% per year. (more than the going rate)

The CD's are sold in increments of $1000 & are FDIC insured. $1,000.00 = One CD $2,000.00 = 2 CD's.....................
Do I have anything to worry about ?
__________________

__________________
ownyourfuture is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

How To Translate A 7 Day Yield Of Of 0.04% To A 1 Year Yield ?
Old 07-12-2016, 02:59 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 2,252
How To Translate A 7 Day Yield Of Of 0.04% To A 1 Year Yield ?

$10,000 x .0004 x 52 weeks = $208 (2.08%)

So you'd have $10,208.

Or is this a trick question?


Sent from my iPad using Early Retirement Forum
__________________

__________________
Married, both 61. DH retired June, 2010. I have a pleasant little part time job.
Sue J is offline   Reply With Quote
Old 07-12-2016, 03:05 PM   #3
Recycles dryer sheets
ownyourfuture's Avatar
 
Join Date: Jun 2013
Posts: 284
Quote:
Originally Posted by Sue J View Post
$10,000 x .0004 x 52 weeks = $208 (2.08%)

So you'd have $10,208.

Or is this a trick question?


Sent from my iPad using Early Retirement Forum
No this is not a trick question, & no disrespect, but I'm 99.99% sure you're wrong
__________________
ownyourfuture is offline   Reply With Quote
Old 07-12-2016, 03:12 PM   #4
Thinks s/he gets paid by the post
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 2,004
Uh, OK. What did Fidelity say when you asked their customer service? I just chatted with them a few minutes ago so I know they are open today.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 07-12-2016, 03:20 PM   #5
Thinks s/he gets paid by the post
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 2,004
Oh, and here is the first link when I googled "7-day yield calculated":

https://en.wikipedia.org/wiki/7-day_SEC_yield

After reading that, I think Sue's answer isn't correct, but I would have made the same mistake without having looked it up.

Following the example in the link above, I think it would be:

$10,000 + (0.04 / 100 * $10,000) / 365 * 365 = $10,004.00

I don't think including the effect of compounding would change the result much ;-P
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 07-12-2016, 03:28 PM   #6
Thinks s/he gets paid by the post
 
Join Date: Mar 2011
Posts: 3,031
Quote:
Originally Posted by ownyourfuture View Post

Hypothetically, if you had $10,000.00 in that fund for one year, & the 7 day yield stayed at that 'exact' rate of 0.04% for the entire period, not counting the little bit of compounding, how much would you have ?
Quote:
Originally Posted by ownyourfuture View Post
No this is not a trick question, & no disrespect, but I'm 99.99% sure you're wrong
If you're sure the answer is wrong, you must know the answer then? Or am I missing something?
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is offline   Reply With Quote
Old 07-12-2016, 03:31 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 13,729
Agree with $10,004... $10,000*(1+.04%).

Technically, I think it is really $10,000*(1+.04%/365)^365 but it is still $10,004.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
pb4uski is offline   Reply With Quote
Old 07-12-2016, 03:37 PM   #8
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 2,252
So I'm off by $204!

Just didn't know why OP needed a calculation when the rate was .04% and he stated it was for 1 week. Sounded like he needed to know what 52 weeks would bring him.

I'm out on my deck, in the shade of the awning, and it's about 98 in the sun. Between bird watching and Amazon Prime browsing I thought I'd offer a quick answer.

Obviously, it was too quick.... Should have done research.


Sent from my iPad using Early Retirement Forum
__________________
Married, both 61. DH retired June, 2010. I have a pleasant little part time job.
Sue J is offline   Reply With Quote
Old 07-12-2016, 03:40 PM   #9
Full time employment: Posting here.
 
Join Date: Jan 2014
Posts: 542
Published yields and returns are expressed on an annual basis after expenses have been deducted.
$10,000 + .04% = $10,004.00

If the MMF has an expense ratio of 0.26%, then the unpublished gross yield before expenses is 0.30%. I have seen people subtract the ER from the published yield.

Regarding the 0.50% 3-month CD, yields are expressed on an annual basis. Each $1k CD will earn about $1.25 (0.50%/12)*3 interest. A 1% high yield savings account currently provides a better return but the rate is not locked.

Quote:
The 7-day SEC Yield is a measure of performance in the interest rates of money market mutual funds offered by US mutual fund companies. It is also referred to as the 7-day Annualized Yield.
Reference: https://en.wikipedia.org/wiki/7-day_SEC_yield
__________________
MBSC is offline   Reply With Quote
Old 07-12-2016, 04:34 PM   #10
Recycles dryer sheets
ownyourfuture's Avatar
 
Join Date: Jun 2013
Posts: 284
Thanks for all the replies.
I didn't mean to trick anyone, or put anyone on the spot. I was simply hoping that someone could translate a 7 day yield of 0.04% into a one year yield.

I think the bottom line is that it doesn't really matter. When you're talking about such a minuscule percentage 0.04% (four one-hundredths of 1.00%)
It really doesn't make any difference.

ATTN Sue: Don't feel bad. When I first tried to figure this out, I came up with the exact same amount.

ATTN: All of you who stated $10,004.00. This looks like the right answer. Thanks! From June 1st through June 30th My average balance was a little over 10k my interest was 9 cents. I still have statements from Fidelity showing a yield of 5.00% Thanks fed

ATTN MBSC: Inside, I knew that 1/2 a percent for three months was too good to be true. Thanks for the clarification. I'll research the high yield savings accounts you mentioned.

I don't know how the rest of you feel about it, but I don't agree with the feds keeping interest rates 'this low'. And I don't feel that way simply because I'm not getting any return on my cash. My mother and father made the bulk of their money in CDs from around 1980 through 2000.

I'd be willing to bet in that they averaged at least 7.00% during that two decade period. Does that mean I want to return to 12 to 15% 30 year mortgage rates, absolutely not. But I just have a terrible feeling that this worldwide phenomenon of printing money is going to turn out bad.

Hope I'm wrong
__________________
ownyourfuture is offline   Reply With Quote
Old 07-12-2016, 05:49 PM   #11
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 2,252
I like my results better

.04% seems like an insult to your $10,000.

I cleaned out a desk drawer and found the passbook for a 8% CD from my local bank. I don't remember what year it was from. It must have been a while ago when they still issued "passbooks". CDs were my favorite investment for a while there.
__________________
Married, both 61. DH retired June, 2010. I have a pleasant little part time job.
Sue J is offline   Reply With Quote
Old 07-12-2016, 08:36 PM   #12
Recycles dryer sheets
ownyourfuture's Avatar
 
Join Date: Jun 2013
Posts: 284
Quote:
Originally Posted by Sue J View Post
I like my results better

.04% seems like an insult to your $10,000.

I cleaned out a desk drawer and found the passbook for a 8% CD from my local bank. I don't remember what year it was from. It must have been a while ago when they still issued "passbooks". CDs were my favorite investment for a while there.
I also had 'passbooks' back in the day
In 1989 I had saved up $10,000. I put it all in a two-year CD at Citibank.
I'm pretty sure they were based in South Dakota back then, & the rate was 9.00% per year. $900 per year in interest, & now I get $4.00
__________________
ownyourfuture is offline   Reply With Quote
Old 07-12-2016, 08:46 PM   #13
Moderator
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands
Posts: 5,803
Columbia S&L 12% CD's in the mid to late 1980's. Remember what happened to that bank?

Getting 0.04% on a $10K CD is a crime.
__________________
......."Everybody has a plan until they get punched in the face." -- philosopher Mike Tyson.
aja8888 is offline   Reply With Quote
Old 07-12-2016, 08:48 PM   #14
Thinks s/he gets paid by the post
RobbieB's Avatar
 
Join Date: Mar 2016
Location: Central CA
Posts: 1,592
Hehe, back in the early 80's I funded my first IRA with a 10% CD.

That was also the interest rate on my mortgage.

Now is a good time to buy a house, not a good time to buy a CD.
__________________
Retired at 59 in 2014. Should have done it sooner but I worried too much.
RobbieB is offline   Reply With Quote
Old 07-12-2016, 08:58 PM   #15
Confused about dryer sheets
ssarwar's Avatar
 
Join Date: Apr 2012
Location: Newburgh
Posts: 1
The expense is $4.20 per $10000 invested.


Sent from my iPad using Early Retirement Forum
__________________
ssarwar is offline   Reply With Quote
Old 07-12-2016, 10:50 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 13,729
Welcome ssarwar but we are talking about an earnings rate on a MM, not an expense ratio.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
pb4uski is offline   Reply With Quote
Old 07-13-2016, 11:10 AM   #17
Recycles dryer sheets
ownyourfuture's Avatar
 
Join Date: Jun 2013
Posts: 284
ATTN RobbieB:
"Now is a good time to buy a house, not a good time to buy a CD"

You got that right!!
__________________

__________________
ownyourfuture is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Could we see a 1% 10-year Treasury note yield? karluk FIRE and Money 14 02-03-2015 05:15 PM
Help with "hybrid bond" in my portfolio (30-yr yield with 1-year duration!) BackcountryMe FIRE and Money 7 02-21-2013 11:04 AM
Goldman's trading prowess doesn't translate to good advice Gone4Good Stock Picking and Market Strategy 7 05-22-2010 09:16 AM
The new baby is home!! St.Patty's Day is his B-Day!! thefed Other topics 20 03-21-2008 04:48 PM
Staying the course is a day-to-day struggle azanon Young Dreamers 37 01-17-2006 03:05 PM

 

 
All times are GMT -6. The time now is 02:32 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.