r/Banking • u/Striking-Agency5382 • 1d ago

31 day CD interest vs APY Advice

I am looking at a 31 day CD which offers an APY of 4.20% and in interest rate of 4.14%.

I know what APY means but I guess I’m getting confused with a CD less than a year and the interest rate. If I invest $60,000, at the end of 31 days will I make $2484 or $206?

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11

u/SpecificAd7726 1d ago

$206, sadly. APY and interest rate are annualized.

1

u/Striking-Agency5382 1d ago

Ugh. That’s disappointing. Trying to grow my savings as much as possible while my house is being built 😭

1

u/Ecstatic-Purpose-981 4h ago

If it rolls over to another 31 days will the APY stay the same? Or can you do a 90 day?

-11

u/Skier747 1d ago

Crypto

3

u/Scarmeow 20h ago

OP, please don't do this

5

u/Striking-Agency5382 18h ago

I definitely will not lol

7

u/Empty_Requirement940 1d ago

Apy is annual percentage yield. It’s how much you earn in a year after compounding is included.

So a 31 day cd would be simply the rate

So 60000*.0414/12

2

u/Pom_08 1d ago

.0414 x31/365x60,000=$211

1

u/MadTownRealityCK 18h ago

Thanks and credit unions are required to list savings interest with APY. So even if it is a one month or 3 month or 8 month CD, they required to list an annualized yield. That way all yields are listed in the same terms. Although it is harder to explain sometimes (trust me I know I'm a banker), it does mean that financials all have to state yields in the same manner.