Options
Choosing a savings account
Factors that determine the
dollar yield on an account
- All money earned comes from the
interest rate (also called rate
of return, or annual yield)
The following
factors reduce money earned and can
even turn it into a loss
- Fees, charges, and penalties
are usually based on minimum balance
requirements or transaction fees.
- Some accounts require a certain
balance before paying any interest.
On money-market accounts, most
banks will pay different interest
rates for different size balances.
(Higher balance earns a higher
rate.)
- Most calculate the balance daily
for purposes of paying interest.
Some use average of all daily balances.
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