Bank CD's. Am I understanding this correctly?

[MustISO]

Our bank has a 7 month CD with a rate of 5.2% and an APY of 5.35%. Is the rate the percentage of interest I would get during the 7 months or is it still based on a 1 year time period like the APY?

 

[FleshLight]

ANNUAL percentage yield.

 

[mk52]

....we all now the answer it's just we really want to get the 5.2% in 7 months.....

 

[b0mbrman]

Originally posted by: MelikK
....we all now the answer it's just we really want to get the 5.2% in 7 months.....

Very true.

FWIW, the difference between the 5.2% and the 5.35% tells you how often interest is compounded...

 

[MustISO]

So then how do you know how much interest you'll earn during the 7 months?

 

[thomsbrain]

Originally posted by: MustISO
So then how do you know how much interest you'll earn during the 7 months?

i suppose you could come up with some wacky way to calculate it (or use an internet calculator!), but just split the difference and multiply by your balance, multiply by 7/12 because you won't actually hold it for a year, and you'll be pretty close.

 

[jlee]

Originally posted by: MustISO
So then how do you know how much interest you'll earn during the 7 months?

Call them and ask.

Or call me at work tomorrow and I'll run it for you, just to be a nice guy. 😛

PM if you want the #.

Edit: I could get you 7mo at 5.16 / 5.30% APY..but you're not local. 🙁