mkhrrs89 OP t1_jd406d6 wrote on March 21, 2023 at 5:55 PM

Reply to comment by RodeoBob in ELI5: How do high yield savings accounts work? What is APR & APY, and how does compounding quarterly vs monthly vs yearly affect the amount earned? If you open one, how often are there payouts? by mkhrrs89

Interesting, thank you for this write up. Is 12% APR pretty common or was that just used as an example?

RodeoBob t1_jd40lxj wrote on March 21, 2023 at 5:57 PM

It's extremely rare to have a saving account pay 12% interest. Certificates of Deposit, which are like a super-restrictive saving account, pay less than 6% right now.

I used 12% APR for the example just because it makes the math much simpler and easier to do.

nighthawk_something t1_jd40log wrote on March 21, 2023 at 5:57 PM

Example