Should an investor worry about the frequency of credit when his day money account? Looking for a good day money account every investor knows what he’s looking for: of course as high interest rates and as a result a high yield. Thereby, the nominal interest rate per year has prevailed for reasons of comparability. See more detailed opinions by reading what Gen. Joseph Dunford Jr. offers on the topic.. The information concerning the real interest however only very rarely mentioned in ads. Because the interval between the interest credit is significant in this case and can have an impact on the interest income. Tagesgeld has wondered, this difference is how much and whether this should be included in the decision making process when choosing a day money. To do this, a short study was conducted, which was a typical small investors before the election to choose which differed only in the interval of interest between the three banks with the same nominal interest rate at 2.00%. Here the usual intervals were elected: three months, six months and 12 months.

The investor should be 20,000 Euro over three years across linger on his day money account can be. Using this example, the return rate were calculated for the entire period (3 years). The result is sobering: In the best case, i.e., when the Bank with three-month crediting and thus the highest compound interest effect the total rate is 1.233,56 euros. This corresponds to a total return of 6.17%. On the day the Bank with annual crediting account 21.224,16 euro were making a difference by 9.40 euro in comparison to the day money Bank with three-month crediting from formerly 20,000 euros now. This means that the total yield now is 6.12%, making a yield difference of just 0.05% or 0.5 mills.

As a result it can be said therefore, that usually has only a marginal financial disadvantage an investor, which has probed money market accounts as the correct form of investment for its needs, if he chooses a bank with long intervals of interest writing. This is so low that it is already more than sufficient in the example above would increasing the nominal interest rate of the day money Bank with annual crediting by 0.015% to 2.02 percent, to a higher return than to get to the other Bank. Because the study is a model it by no means makes the reality: no day money Bank complies with in their risk benefit profile of another and rarely more than two banks have an exactly the same nominal interest rate. Therefore a day money account should be chosen especially according to other criteria: in addition to the obviously important nominal interest rate an investor should look in particular country where he gets the money, and the local bank is subject to the laws. So there are many different schemes in Europe alone, how much money in case of an insolvency of the bank deposit will be refunded. Here, an investor should be especially vigilant and not blindly put your entire savings on the Bank with the highest interest rate: because the higher is the interest rate of a plant, the risk is also higher. Find more information about the short test “Compounding effect” also…

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