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#2184631 - 07/09/18 08:26 PM 6 month CD - Compounding and Crediting Question
Likes to Comply Offline
Diamond Poster
Joined: Nov 2008
Posts: 1,062
In the mountains
A 6 month CD where the interest will credited to the CD at maturity and the CD is set up for automatic renewal - would this mean the compounding is disclosed as "Interest will be compounded at maturity."

What is disclosed for compounding if the interest will be credited to a separate account or paid by check at maturity?

Thanks in advance.
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Operations Compliance
#2185120 - 07/12/18 03:10 PM Re: 6 month CD - Compounding and Crediting Question Likes to Comply
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Quote:
A 6 month CD where the interest will credited to the CD at maturity and the CD is set up for automatic renewal - would this mean the compounding is disclosed as "Interest will be compounded at maturity."

You could say interest is compounded at maturity, interest is compounded semi-annually or interest is compounded every 6 months.

Quote:
What is disclosed for compounding if the interest will be credited to a separate account or paid by check at maturity?

Crediting is not a factor when it comes to compounding or the APY calculation. Always disclose the compounding frequency the same, whether the interest is compounded or paid out (by check or deposited to another account).
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David Dickinson
http://www.bankerscompliance.com

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#2185168 - 07/12/18 06:19 PM Re: 6 month CD - Compounding and Crediting Question Likes to Comply
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Diamond Poster
Joined: Nov 2008
Posts: 1,062
In the mountains
Thank you very much for your help!!!
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