When I opened a 12 month CD account, I thought the interest would be paid on the new balance every month, but that is not the case. The interest is paid on the amount of the original deposit every month. Is this the way all banks figure and pay the interest on CD's? Or are there differences with different banks?How do bank's figure interest on a 12 month cd?
I have a 12-month CD with ING Direct, and the interest is compounded monthly and posted monthly to my account. I guess it depends on the compounding method used on your CD. It sounds like simple interest...
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