# Bank Savings Interest Rate **URL:** \ **Category:** Factual Questions\ **Created:** [May 2, 2002, 1:37am UTC](https://boards.straightdope.com/t/bank-savings-interest-rate/106772 "2002-05-02T01:37:23Z")\ **Posts on this page:** 16\ **Page:** 1
**Author:** ![rookie523](https://avatars.discourse-cdn.com/v4/letter/r/71c47a/32.png) [@rookie523](https://boards.straightdope.com/u/rookie523)\ **Post date:** [May 2, 2002, 1:37am UTC](https://boards.straightdope.com/t/bank-savings-interest-rate/106772/1 "2002-05-02T01:37:23Z")
I put some money into an account last month. The interest rate is 2%(monthly). I put $20 the first day. then $800 a week later. then $600 2 weeks later, then $79 about 3 weeks after that. My interest came out to $1.73. The money has been in there for about 1 1/2 months. Does that look right? I thought it should come out to more than that. like $10. Can anyone help me with this? I’m a retard with bank interest rates… Thanks! ---
**Author:** ![rjk](https://avatars.discourse-cdn.com/v4/letter/r/ed655f/32.png) [@rjk](https://boards.straightdope.com/u/rjk)\ **Post date:** [May 2, 2002, 1:53am UTC](https://boards.straightdope.com/t/bank-savings-interest-rate/106772/2 "2002-05-02T01:53:57Z")
The bank is probably only counting full months, and quite likely deducts various charges from the interest. Check your statement for details, and go ask about it if the statement isn’t clear. ---
**Author:** ![rookie523](https://avatars.discourse-cdn.com/v4/letter/r/71c47a/32.png) [@rookie523](https://boards.straightdope.com/u/rookie523)\ **Post date:** [May 2, 2002, 2:02am UTC](https://boards.straightdope.com/t/bank-savings-interest-rate/106772/3 "2002-05-02T02:02:08Z")
there is no hidden fees or anything. can anyone else help? ---
**Author:** ![Duckster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/duckster/32/1244_2.png) [@Duckster](https://boards.straightdope.com/u/Duckster)\ **Post date:** [May 2, 2002, 2:07am UTC](https://boards.straightdope.com/t/bank-savings-interest-rate/106772/4 "2002-05-02T02:07:13Z")
Umm, are you sure you earn two percent _monthly_? I bet the interest rate is two percent _annually_. Is the interest rate simple interest or compound interest? When is the interest credited to the account? ---
**Author:** ![rookie523](https://avatars.discourse-cdn.com/v4/letter/r/71c47a/32.png) [@rookie523](https://boards.straightdope.com/u/rookie523)\ **Post date:** [May 2, 2002, 2:12am UTC](https://boards.straightdope.com/t/bank-savings-interest-rate/106772/5 "2002-05-02T02:12:49Z")
wow i didn’t know that would make a difference… i know it’s monthly. (that’s what’s posted) I’ll try to find out about the simple, compounded etc… Thanks!!! ---
**Author:** ![pkbites](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pkbites/32/204_2.png) [@pkbites](https://boards.straightdope.com/u/pkbites)\ **Post date:** [May 2, 2002, 2:18am UTC](https://boards.straightdope.com/t/bank-savings-interest-rate/106772/6 "2002-05-02T02:18:22Z")
> [@](#): > > \*Originally posted by rookie523 \* > \*\*i know it’s monthly. (that’s what’s posted) > \*\* Please, please, please! Pretty please, with sugar on top. Please tell me where a regular savings account is giving you 2% interest monthly. I’m begging you! Please tell me. The banks around where I live only pay about 2.3% annually. ---
**Author:** ![rookie523](https://avatars.discourse-cdn.com/v4/letter/r/71c47a/32.png) [@rookie523](https://boards.straightdope.com/u/rookie523)\ **Post date:** [May 2, 2002, 2:38am UTC](https://boards.straightdope.com/t/bank-savings-interest-rate/106772/7 "2002-05-02T02:38:21Z")
[http://finance.canada.com/bin/tabulate?Type=savemd](http://finance.canada.com/bin/tabulate?Type=savemd) Does monthly mean monthly? or is that a sneaky way of meaning annually? ---
**Author:** ![Duckster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/duckster/32/1244_2.png) [@Duckster](https://boards.straightdope.com/u/Duckster)\ **Post date:** [May 2, 2002, 3:21am UTC](https://boards.straightdope.com/t/bank-savings-interest-rate/106772/8 "2002-05-02T03:21:24Z")
I chose Manulife Bank at random. The figures listed on the link you provided list 2.250 percent “monthly interest.” So I went to [Manulife Bank](http://www.manulifebank.com) and looked up the current rates, _as well as the explanation of rates_. It pays to read _and understand_ the fine print "The Manulife One base rate\* is a variable rate that is not guaranteed and may fluctuate. Variable interest rates are calculated on the daily closing balances and charged monthly. These accounts may be paid off at any time without penalty. Our Fixed rates are set from time to time and are guaranteed for the term selected. Interest is calculated monthly, not in advance. The early termination of a fixed rate account will be subject to an interest penalty. The Credited rate is a current variable interest rate that fluctuates and is not guaranteed. It is applied to any funds in the Main account when the Main account is in a positive position. This interest is calculated on the daily closing balance and paid monthly. \*The Manulife One Base Rate is a variable rate of interest that is: determined by Manulife Bank of Canada from time to time; **expressed as a percentage per year: and, calculated monthly, not in advance** It is the reference rate for loans made for Canadian dollars in Canada under Manulife One." Your are earning interest at an _annual rate!_ Besides, the US Fed Funds rate is only 1.85 percent. There is _no way_ any legitimate financial institution in the US or Canada with pay you 24 percent annual interest right now and still remain in business. Best you do some homework about saving accounts, interest rates, and read the financial pages for a while. ---
**Author:** ![rookie523](https://avatars.discourse-cdn.com/v4/letter/r/71c47a/32.png) [@rookie523](https://boards.straightdope.com/u/rookie523)\ **Post date:** [May 2, 2002, 3:43am UTC](https://boards.straightdope.com/t/bank-savings-interest-rate/106772/9 "2002-05-02T03:43:36Z")
then what’s the difference between daily and monthly then? wouldn’t daily be the same? annual but calculated daily? i have tried finding information on savings interest… but it’s hard to find. i checked my bank’s website… but couldn’t find info. "Interest is calculated daily and paid monthly. Record keeping is simplified with a choice of passbook or monthly statement. Debit transactions are charged at 85¢ each" what does that mean? i have very little idea of how to look for information. don’t you think if i knew what to look for i’d find it?.. ---
**Author:** ![rookie523](https://avatars.discourse-cdn.com/v4/letter/r/71c47a/32.png) [@rookie523](https://boards.straightdope.com/u/rookie523)\ **Post date:** [May 2, 2002, 3:53am UTC](https://boards.straightdope.com/t/bank-savings-interest-rate/106772/10 "2002-05-02T03:53:06Z")
here is where i may have been mislead… [http://cgi.scotiabank.com/rates/dep\_acct\_rates.html](http://cgi.scotiabank.com/rates/dep_acct_rates.html) here is states annual interest rate… i guess i have to move the money to my RSP…(but i want the money fairly liquid) Thanks for the info and help! ---
**Author:** ![Duckster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/duckster/32/1244_2.png) [@Duckster](https://boards.straightdope.com/u/Duckster)\ **Post date:** [May 2, 2002, 3:54am UTC](https://boards.straightdope.com/t/bank-savings-interest-rate/106772/11 "2002-05-02T03:54:17Z")
> [@](#): > > \*Originally posted by rookie523 \* > then what’s the difference between daily and monthly then? > wouldn’t daily be the same? Go to your bank and speak to a real live human being. Have them explain their rates and fine print to you. > [@](#): > > annual but calculated daily? > > i have tried finding information on savings interest… but it’s hard to find. > > i checked my bank’s website… but couldn’t find info. Go to your bank and speak to a real live human being. Have them explain their rates and fine print to you. > [@](#): > > "Interest is calculated daily and paid monthly. > > Record keeping is simplified with a choice of passbook or monthly statement. > > Debit transactions are charged at 85¢ each" > > what does that mean? Go to your bank and speak to a real live human being. Have them explain their rates and fine print to you. > [@](#): > > i have very little idea of how to look for information. don’t you think if i knew what to look for i’d find it?.. \*\* Rule number one when it comes to investing: Before you invest, be it a simple savings account at a bank, or playing the stock market, do your homework, ask questions (like here) and make sure you understand everything before you sign on the dotted line and hand over your cash. Great site for newbies and experienced folk alike - [http://www.fool.com/](http://www.fool.com/) Also see - [http://www.bankrate.com/brm/green/sav/svgs1a.asp](http://www.bankrate.com/brm/green/sav/svgs1a.asp) ---
**Author:** ![rookie523](https://avatars.discourse-cdn.com/v4/letter/r/71c47a/32.png) [@rookie523](https://boards.straightdope.com/u/rookie523)\ **Post date:** [May 2, 2002, 4:00am UTC](https://boards.straightdope.com/t/bank-savings-interest-rate/106772/12 "2002-05-02T04:00:48Z")
i did speak to a guy… a guy at the pc financials… i guess he was misleading me… he kept insisting that it was monthly not annual. he also kept saying i would get a lot more in interest than competing places… dang that guy… but i didn’t lose money…(lost interest on money perhaps)… Thanks for the sites. I will speak to a guy where I work(My wealthy carpenter)… dang that guy… i was going to ask tomorrow at a bank… but then again, i have an excellent source right here… and i remain anonymous… ---
**Author:** ![erislover](https://avatars.discourse-cdn.com/v4/letter/e/71e660/32.png) [@erislover](https://boards.straightdope.com/u/erislover)\ **Post date:** [May 2, 2002, 1:36pm UTC](https://boards.straightdope.com/t/bank-savings-interest-rate/106772/13 "2002-05-02T13:36:50Z")
If your annual interest rate (for the sake of calculation) was 3.65% then your daily rate is .00365%. To calculate interest on a balance that is only compounding dialy (no additions) you would use the somewhat simple mormula P(1+r)[sup]t[/sup], where P is your principle, _r_ is your _daily interest rate_ (annual rate/365) and _t_ is the number of days your interest is compounding. Very simple formula, and works in excel quite well if you want to chart out your savings over time. ---
**Author:** ![missbunny](https://avatars.discourse-cdn.com/v4/letter/m/76d3ee/32.png) [@missbunny](https://boards.straightdope.com/u/missbunny)\ **Post date:** [May 2, 2002, 3:25pm UTC](https://boards.straightdope.com/t/bank-savings-interest-rate/106772/14 "2002-05-02T15:25:14Z")
If I were you, I’d advise the bank that certain employees are either extremely misinformed about the services the bank offers and need intensive training, or that they are flat-out lying to people. What kind of an idiotic bank employee could ever think that a bank would pay 24% interest on a savings account? ---
**Author:** ![erislover](https://avatars.discourse-cdn.com/v4/letter/e/71e660/32.png) [@erislover](https://boards.straightdope.com/u/erislover)\ **Post date:** [May 2, 2002, 3:34pm UTC](https://boards.straightdope.com/t/bank-savings-interest-rate/106772/15 "2002-05-02T15:34:49Z")
Of course, I fixed the numbers for ease of calculation and then screwed it up. Of course, APR/365 is how it is done. The daily interest rate in my example should be 0.01%. I have never seen advertisements or posters or anything which have ever given anything other than the APR. This goes for credit cards, too, for anyone who cares to try to calculate out their interest there (excel also works good for that, but there’s an extra step when you make payments). If you see any interest rate (given as a percentage) which isn’t preceeded by at least one zero after the decimal point then you are looking at the APR. I think that is the safest bet in the country. 🙂 ---
**Author:** ![rookie523](https://avatars.discourse-cdn.com/v4/letter/r/71c47a/32.png) [@rookie523](https://boards.straightdope.com/u/rookie523)\ **Post date:** [May 2, 2002, 3:54pm UTC](https://boards.straightdope.com/t/bank-savings-interest-rate/106772/16 "2002-05-02T15:54:48Z")
dang… the person that works that the pc bank…is not there. but pc bank… is not a bank really. it’s president’s choice (food company) getting into banking. they offer free service(no charge using ATM or interac)… etc. they don’t have any tellers or locations with bank setups. just 3 locations with account pushers. i’m going to complain to the company though.