04-05-2007, 11:56 AM
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Rear Admiral Upper Half
  
Join Date: Oct 2000
Location: the peanut gallery
Posts: 3,908
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Question about CD, specifically from ING
n00b-ish question
When opening a CD account from ING, they ask if you'd like interest disbursements. Well, if you elect not to have interest disbursements, the interest you gain goes into the CD account, right? and does that interest that you earn end up gaining interest, ie. does it compound? tia daUnit
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04-05-2007, 02:36 PM
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#2 |
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Lieutenant Commander
 Join Date: Dec 2002
Posts: 783
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Yes, it compounds. That's why the annual yield is a hair higher than the annual rate.
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04-05-2007, 03:12 PM
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#3 |
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Lieutenant
Join Date: Jan 2007
Location: Yorba Linda
Posts: 347
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yup! true that!
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04-05-2007, 03:36 PM
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#4 |
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Rear Admiral Upper Half
Join Date: Oct 2000
Location: the peanut gallery
Posts: 3,908
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so its better that you don't take interest disembursements? i've read on the ING faq that CD interest gets compounded annually, and most of their CD terms with good rates are ones that are under 12 months, so wouldnt it be better to just get the interest and put it in another savings account thats making interest (albeit, not as good a rate as the CD)?
hope that makes sense..... |
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04-05-2007, 03:52 PM
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Vice Admiral
Join Date: Jun 2003
Location: Oklahoma - Just Recently moved from San Diego
Posts: 4,213
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If they are only compounding annually, the best is to get the largest CD that you can, and get Interest Disbursing. Take that and put it into another account. Yes. (IMHO)
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04-05-2007, 04:26 PM
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#6 |
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Lieutenant Commander
Join Date: Dec 2002
Posts: 783
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My bad, I was thinking of their savings account. Thesifer is right. Without monthly disbursements they get to hold the interest for a year without paying interest on it.
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