At first glance, a higher interest rate on a savings account may seem better for your savings. But depending on how this interest is calculated, you could actually receive a better return on a daily savings account with a lower interest rate.
Some high interest savings accounts calculate interest based on a minimum monthly balance, paying its interest only annually.
This means if you had $5,000 in your savings account for the entire month, with the exception of one day where the balance fell to $1,000, the interest earned for that month is only on the $1,000, which is then calculated and paid annually.
In other words, you don't benefit from the power of compound interest on your full $5,000 calculated daily and paid to you monthly.
Here at Cambrian, we offer an interest rate of 3.45%* on your entire balance. Interest is calculated on the daily closing balance and paid monthly, allowing your savings to compound its interest throughout the year.
This will allow your savings to grow more quickly than it would at a higher interest rate calculated on the lowest monthly balance paid annually.
For more information about Cambrian’s Premium Savings Account, visit us in-branch or book a meeting online with one of our Digital Advisors.
*Effective October 20, 2023, and subject to change without notice.
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