I think our CD Special is disclosing an inaccurate APY. It is less than the interest rate!

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Question:

My bank is doing CD specials a lot lately, and with rates being higher, there are now actual differences between the interest rate and the APY. I want to get it right! I’m concerned that something is wrong with our 13 month CD special (interest paid at maturity), because the APY is LESS than the interest rate. How can this be?!

Answer:

Yes, that is accurate! If the CD is not compounding interest at least annually, the Annual Percentage Yield will reflect that the account is not realizing the full interest rate in one year. Join the upcoming webinar “APY and APR Accuracy (Bonus! Using the FFIEC Calculator on TRID Loans)” on May 23, 2024 to learn more!
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Learn more about Rebekah Leonard’s
APY and APR Accuracy (Bonus! Using the FFIEC Calculator on TRID Loans) webinar.