2.125% interest (half of 4.25% annualized, since you are leaving the entire money in for half year) = 2.125 * $100k / 100 = $2,125.This is interesting to me. But I'm having a little trouble following the math.
For simplicity, let's say I put in $100,000, and don't touch it until I withdrawal it all after 181 days.
What would be the total amount I would get back (before taxes, of course)?
Plus the $1,500 bonus.
Total = $3,625, but this is earned only within half-an-year, so the yield is $3,625 / $100,000 = 7.25%.
If you don't touch it for only 105 days (not 181), and immediately remove the money from the account to elsewhere where you can get higher interest than 4.25%, then the calculations are:
bonus = $1,500 (flat amount)
interest paid = 4.25% * (105 days / 365 days) * $100,000 = $1,222.50
Total amount = $2,722.50 but this is earned within 105 days, so the effective APY = $2,722.50 / $100,000 * (365 days/105 days) = 9.46%
The effective yield will hit a peak of 9.46% and then starts to gradually decline the longer you take to withdraw the money.
Just remember to NOT close the savings account until the 181st day. You can leave as little as $1 to keep the account open
Statistics: Posted by lakpr — Fri Jun 21, 2024 4:45 am — Replies 9 — Views 873