Icesave 2 Year Fixed Rate - Is compounding included in AER?
Joey122
Posts: 455 Forumite
Icesave offer a 2 year AER paying 6.6% and they pay they interest on maturity.
Since they pay the interest at maturity there is no compounded interest - Is this reflected in the AER?
Does it make a material difference to the interest rates?
Since they pay the interest at maturity there is no compounded interest - Is this reflected in the AER?
Does it make a material difference to the interest rates?
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Comments
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Since they pay the interest at maturity there is no compounded interest - Is this reflected in the AER?Does it make a material difference to the interest rates?
Edit: It looks to me like Icesave actually do pay interest either annually or monthly according to this page, so I'm not sure where you got the information that interest is not paid until maturity.0 -
Since they pay the interest at maturity there is no compounded interest - Is this reflected in the AER?
When they pay the interest .... and when they calculate it, are often different.
As the AER and gross Interest are the same (6.6%) ... it's compoundedIf you want to test the depth of the water .........don't use both feet !0
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