Monthly or Yearly Interest?

It depends how much you'd get, monthly / yearly, and whether you could wait for the first year. Also you'd eventually lose out, as being paid in arrears, on average you'd not receive 6 months worth of payment.

Is that if you was paid yearly?

If you're just going to withdraw the money, treating it as income, it depends on what you'd be spending it on. A modest bottle of bubbly each month or a major party each year, take your pick. But watch out, as often the interest you'd get each month is less than a twelfth of what you'd get each year. Your spending preference may well outweigh any cash-terms shortfall, though, so it may not matter. Cash flow might be a concern, so if you have substantial savings such as from a lotter win, house sale, or inheritance, and the interest represents most if not all of your income, monthly may be best.

If you're going to leave the interest in the account to grow as long term savings, what matters is the bottom line. Work out how the compounding works, bearing in mind when tax is deducted. As a rule of thumb, yearly-paying accounts pay slightly more, but not always.

"Donna" wrote

No, neither. I'd ignore that comment if I were you!

Sorry, yes.

Well, unless you count receiving money after you are dead as useful....

"Tumbleweed" wrote

If you needed the money before you died, you'd withdraw it from the a/c.

If you *also* needed the interest which had accrued (in the past 6 months say), which had not yet been allocated - then you close the a/c and get it before the year is up.

Now where's the problem?

If you want to move the money to other accounts on a regular (< 1 yr) basis, the monthly may be better.

cd