Author Topic: Interest Rate Math Question (sigh)  (Read 2842 times)

Workinghard

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Interest Rate Math Question (sigh)
« on: April 30, 2014, 03:00:24 PM »
What's is the difference in money earned if I had 35k in a savings account with Ally at 0.87% APY and interest rate versus the same amount at MMA in SunTrust at 0.05 APY and interest over the course of a year? I'm trying to decide if it's worth changing since we keep a large balance in our checking account anyway of 2-3 month's bills.

homeymomma

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Re: Interest Rate Math Question (sigh)
« Reply #1 on: April 30, 2014, 03:09:03 PM »
I'm not good at this stuff. I'm seeing this too simply perhaps.
35k x .0087 = 304
35k x .0005 = 17

Am I wrong?

Seems worth switching to me.

griffin

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Re: Interest Rate Math Question (sigh)
« Reply #2 on: April 30, 2014, 03:36:26 PM »
I'm not good at this stuff. I'm seeing this too simply perhaps.
35k x .0087 = 304
35k x .0005 = 17

Am I wrong?

Seems worth switching to me.
Nope you're entirely correct, assuming the amount of money in the account remains unchanged throughout the year. 35k is a lot of cash, but if you're sure you want to hold onto that much I'd definitely switch!

lb

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Re: Interest Rate Math Question (sigh)
« Reply #3 on: April 30, 2014, 04:07:05 PM »
We have about 40K in the same Ally Money Market account at  0.87% that we are saving for a downpayment on a house. It throws off about 30 bucks a month in interest. Free $!

Workinghard

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Re: Interest Rate Math Question (sigh)
« Reply #4 on: April 30, 2014, 04:09:49 PM »
Awesome! I'll "save" the calculations so I know how to do it in the future. The cash is for a vacation next year to Europe, a replacement car when we need it (ours are 12 and 15 yrs old), and possible roof replacement looming in the future.

Thanks for the help!

Lb, was there a reason you went with the MMA vs the savings account?

arebelspy

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Re: Interest Rate Math Question (sigh)
« Reply #5 on: April 30, 2014, 06:01:51 PM »
SmartyPig.com (BBVA Compass Bank), online only bank, offers 1%. Transfers take a few days in/out, but if you're not going to need the money on a day's notice, it's good for short term funds.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Workinghard

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Re: Interest Rate Math Question (sigh)
« Reply #6 on: April 30, 2014, 07:22:09 PM »
SmartyPig.com (BBVA Compass Bank), online only bank, offers 1%. Transfers take a few days in/out, but if you're not going to need the money on a day's notice, it's good for short term funds.

That's better than Ally. I'll have to check them out.  Thanks!

MarciaB

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Re: Interest Rate Math Question (sigh)
« Reply #7 on: April 30, 2014, 07:28:07 PM »
I'm getting 1% from MySavingsDirect (just switched recently...my other online bank was paying a whopping 0.1% - one-tenth of one percent - so I got a ten-fold increase by switching. Totally worth doing.

Workinghard

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Re: Interest Rate Math Question (sigh)
« Reply #8 on: April 30, 2014, 07:39:35 PM »
I'm getting 1% from MySavingsDirect (just switched recently...my other online bank was paying a whopping 0.1% - one-tenth of one percent - so I got a ten-fold increase by switching. Totally worth doing.

Have to admit, I like their name and website better than what arebelspy posted (no offense intended)!

arebelspy

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Re: Interest Rate Math Question (sigh)
« Reply #9 on: May 01, 2014, 07:39:04 AM »
I'm getting 1% from MySavingsDirect (just switched recently...my other online bank was paying a whopping 0.1% - one-tenth of one percent - so I got a ten-fold increase by switching. Totally worth doing.

Have to admit, I like their name and website better than what arebelspy posted (no offense intended)!

lol, I don't take any offense, I have no dog in the fight.

I agree that SmartyPig's name is stupid, but I don't really care about the name of the bank I use.  It's not a relevant factor to me.  :)
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.