# Term Deposit - Interest paid monthly vs yearly

**URL:** <https://boards.straightdope.com/t/term-deposit-interest-paid-monthly-vs-yearly/712891>\
**Category:** Factual Questions\
**Created:** [February 17, 2015, 7:26am UTC](https://boards.straightdope.com/t/term-deposit-interest-paid-monthly-vs-yearly/712891 "2015-02-17T07:26:06Z")\
**Posts on this page:** 3\
**Page:** 1

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**Author:** ![JohnClay](https://avatars.discourse-cdn.com/v4/letter/j/c37758/32.png) [@JohnClay](https://boards.straightdope.com/u/JohnClay)\
**Post date:** [February 17, 2015, 7:26am UTC](https://boards.straightdope.com/t/term-deposit-interest-paid-monthly-vs-yearly/712891/1 "2015-02-17T07:26:06Z")

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> **[Term Deposit rates](https://www.westpac.com.au/personal-banking/bank-accounts/term-deposit/rates/)**
>
> Explore Westpac's Term Deposit rate table to start your savings journey, and earn a guaranteed return that suits your budget and lifestyle.

For maturity/annually the minimum rate is 2.5% p.a. For monthly the minimum rate is 2.3% p.a. All of the corresponding rates are also less for monthly.

Is one rate better than the other or do they somehow work out to be the same? Or is the only advantage of monthly interest is that if you withdraw the money early you get some interest rather than none?

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**Author:** ![JohnClay](https://avatars.discourse-cdn.com/v4/letter/j/c37758/32.png) [@JohnClay](https://boards.straightdope.com/u/JohnClay)\
**Post date:** [February 17, 2015, 8:42am UTC](https://boards.straightdope.com/t/term-deposit-interest-paid-monthly-vs-yearly/712891/2 "2015-02-17T08:42:47Z")

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I rang up the bank and they said that I’d get slightly more interest if it is paid annually

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**Author:** ![Saint\_Cad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/saint_cad/32/18907_2.png) [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)\
**Post date:** [February 17, 2015, 3:25pm UTC](https://boards.straightdope.com/t/term-deposit-interest-paid-monthly-vs-yearly/712891/3 "2015-02-17T15:25:05Z")

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Calculate the APR

or here is another way to think about it, compound the principal and the interest you earn. If you do that you will earn approximately 2.3244% on your money invested monthly.

or do what I teach my students. For a given rate r and term t the maximum you can earn in at that interest rate (viz. continuous compounding) is e[sup]rt[/sup]. If looking at one year you are looking at the maximum APR. In this case at 2.3% the max you get is a hair above 2.32665%