CD Interest

[wrigley]

It seems like most CDs I looked at pay a slightly higher interest rate if paid out at maturity vice monthly. Is this just a personal preference thing or am I missing something here?

Thanks
Mike

 

[disneysteve]

It seems like most CDs I looked at pay a slightly higher interest rate if paid out at maturity vice monthly. Is this just a personal preference thing or am I missing something here?

Thanks
Mike

If you don't take the interest out monthly, it compounds. That's why the payout at maturity is higher.


Note that this is not true with brokered CDs, although those generally pay much better rates so they are still typically the better choice.

 

[wrigley]

If you don't take the interest out monthly, it compounds. That's why the payout at maturity is higher.


Note that this is not true with brokered CDs, although those generally pay much better rates so they are still typically the better choice.

Thank You

Mike