Question about BANK CDs

bkzkurse

bkzkurse

890
74
Joined
Jan 7, 2004
If a CD APY rate is 5% - its a 3 month CD
You put in lets say $1000.
Will you recieve $1050 after the 3 months?

Basically what Im asking is do they pay you the return after the 3month maturity date because the idea of ANNUAL percent yeild confuse me a little.

thanks
smile.gif
 
You'd get $12.49

$1000+5%=1050
5%=$50divided by 12 months=4.167
4.167x3months=12.49
 
Okay, look at it this way. You have 100 dollars. The CD is 6 months. The APY (ANNUAL Percentage Yield) is 5%. You deposit that 100 dollars. The term of the CDis considered x and you divide x by 12 (12 months in a year). The CD term (6 months) is exactly half of a year (6/12) or (1/2). In one FULL year, that $100would give you $5. You take that 5 dollars and divide it by 2 (what you got when you divided 6 into 12). When your CD matures, you will have a total of$102.50.

Edit: Haha, I just realized I got real algebraic but that's the only way I can explain it cause that's how they taught us in training for the bank.
roll.gif
 
So you should only mess with CD's if you're dealing with some serious money than?
 
Originally Posted by 703 Hwy

So you should only mess with CD's if you're dealing with some serious money than?
Click to expand...
Basically. I don't see a point in putting away $10,000 for 5% for 12 months. That's only $500. I know I could make more than $500 messing withthe stock market with $10,000
ohwell.gif
. Unless you have like 100,000 that youreally just don't care about, then I wouldn't do it. If you withdraw it early, there's a penalty and you're gonna end up with even less thanthat.
 
dude ... the only way you are gonn amake serious money is to get lucky ... cds and!%$* aint nothing ... you can put a grand away in a CD and after a year youwake like 40 bucks ... why do you think people sell drugs? youre better off buying 40 dollars worth of scratch offs
 
Originally Posted by MoMoNeY848

Originally Posted by 703 Hwy

So you should only mess with CD's if you're dealing with some serious money than?
Click to expand...
Basically. I don't see a point in putting away $10,000 for 5% for 12 months. That's only $500. I know I could make more than $500 messing with the stock market with $10,000
ohwell.gif
. Unless you have like 100,000 that you really just don't care about, then I wouldn't do it. If you withdraw it early, there's a penalty and you're gonna end up with even less than that.
Click to expand...

CD's serves their purpose. For some people, it's not really about making money, or at least not making a lot of money fast. To some it's asavings, extra money that people just want to save up for the future.CD's are actually good if you have control problems with saving money. Placing youmoney is a CD will not let you touch the money for the remainder of the term without paying a fee. I personally prefer an E-Savings account though since I canadd to it and earn a little more every month, they have competetive rates to CD's too, ranging from 4.5%-5.5%.
 
5% APR means (.05/12 monthly = .0041667)

.00401667 is the rate that you will receive each month.

then you use the equation...

= m (1 + .R ) ^ n

m is the amount of money you will start with (1000)
n is the term length, (three months)
R is the rate that you will use (.0041667)

= 1000 (1 + .00401667 ) ^ 3

=1012.098476

You will earn about 12 bucks over the span of 3 months, Which is a lot better than a lot of the savings accounts of today. Look out for a WAMU savings programthat gives you 5% on a SAVINGS account, meaning it is liquid at any time and you can withdraw at any time.

Hope this helps.
 
Originally Posted by RFX45

Originally Posted by MoMoNeY848

Originally Posted by 703 Hwy

So you should only mess with CD's if you're dealing with some serious money than?
Click to expand...
Basically. I don't see a point in putting away $10,000 for 5% for 12 months. That's only $500. I know I could make more than $500 messing with the stock market with $10,000
ohwell.gif
. Unless you have like 100,000 that you really just don't care about, then I wouldn't do it. If you withdraw it early, there's a penalty and you're gonna end up with even less than that.
Click to expand...

CD's serves their purpose. For some people, it's not really about making money, or at least not making a lot of money fast. To some it's a savings, extra money that people just want to save up for the future.CD's are actually good if you have control problems with saving money. Placing you money is a CD will not let you touch the money for the remainder of the term without paying a fee. I personally prefer an E-Savings account though since I can add to it and earn a little more every month, they have competetive rates to CD's too, ranging from 4.5%-5.5%.
Click to expand...

To add to this post, CD are also a lot less risky than stocks. This is why you can make up to 11% or more with stocks, but run a higher risk that you willalso lose money. Additionally, imagine if you amassed around 100 million a year. ( I know I know... this is just an example) If you put that into a solid CDwith a Solid rate, you could LIVE OFF THE INTEREST THE REST OF YOUR LIFE. With a 5% APR, you wouldn be earning around 416,666 dollars a month... for lettingyour money sit in this bank account. This means that your money would be earning your money for you, and you wouldn't have to work at all in your life everagain. with 10 million, you would be earning 40,000 plus for letting your money sit. now couple that with the money you could be making working.... and thesky's the limit.
This my friends, is how the rich get richer.

Edit: It's posts like these that set the GR forum miles apart from other *cough cough* child-themed forums
General > all
 
I mean I see both sides of the spectrum but I still don't like them. Unless I get a million dollars, it's not worth it to me with savings accountsbeing as high as they are interest wise. My savings is at 4%. But this is actually a good discussion.
 
^^^ My savings account have been on a consistent 4.9%-5.0% which I'm pretty happy with. I wish I knew how to play the stock market but I don't and therisk of losing your money when you have no clue what is going on is pretty high.
 
man stock market is too violotile now. The Dow one day goes up 100 points - next day drops down 200 points.

Make CnnMoney your homepage and you'll see very disturbing things
 
Originally Posted by ImmaGetMine

i thought the title said BLANK CDs...lol
Click to expand...

Me too and then I see all this percentage yield *@+% and I'm like.... CDs have a life span of only a couple years, wtf????
 
Originally Posted by RFX45

^^^ My savings account have been on a consistent 4.9%-5.0% which I'm pretty happy with. I wish I knew how to play the stock market but I don't and the risk of losing your money when you have no clue what is going on is pretty high.
Click to expand...
Yeah, I "dabbled" around a little earlier this year. Made a cool $100
laugh.gif
. I actually only invested about $600 though. Gotta love Apple when the iPhonedropped
pimp.gif
. You really gotta study the stock before you invest andit's hit and miss sometimes. I'm definitely gonna do it again after this whole Christmas/Girlfriend's birthday/Valentine's Day fiasco is overthough.
 
^^^ ironically, that was the one stock I was going to jump to last year as well but didn't get to doing so. Plus I thought the same with the PS3 and 360dropping also but those turned horribly wrong, MS and Sony's stock didn't skyrocket as much as I thought it would. $100 for a $600 investment isn'tbad at all.
 
Right now is a good time to buy stocks since they are down. So that way when they go back up you would have bought more shares at a lower price. So researchand buy now before you regret it.
 
Originally Posted by bkzkurse

man stock market is too violotile now. The Dow one day goes up 100 points - next day drops down 200 points.

Make CnnMoney your homepage and you'll see very disturbing things
Click to expand...

you gotta be alert and quick
 
Capital gains -
Short term - you buy the stock today, sell it tomorrow for a gain its taxable at your current income level
Long term - you buy the stock and sell it 366 days later, you'll be taxed at the 15% capital gains rate.
 
You must log in or register to reply here.

The ultimate sneaker enthusiast community.

NikeTalk was created as a way of giving back to both the sneaker enthusiast community and to the greater global community of which we are all a part.

NikeTalk is NOT affiliated with Nike Inc. in any way, shape, or form. All opinions expressed herein do not necessarily reflect those of Nike, Inc.

© 1999-2024 NikeTalk.com

Share this page

Back
Top Bottom