Author Topic: The banks' double standard (Read 801 times)

pjohns · « **on:** June 06, 2017, 06:35:43 pm »

Has anyone else noticed just how cynical the banks can be?

Just today, I received in the mail two offers, from different banks: One offered a loan at a certain Annual Percentage Rate (APR). This is in keeping with what I grew up with.

The other offered a savings account with a certain Annual Percentage Yield (APY).

To compare the two is like comparing apples with oranges, since one takes into account compounded interest, whereas the other does not.

Presumably, these folks are just hoping that no one will notice the difference...

driftdiver · « **Reply #1 on:** June 06, 2017, 06:44:31 pm »

If there is one group of people more dishonest then used car salesmen its the bankers.

Hurricane Andrew · « **Reply #2 on:** June 06, 2017, 06:47:45 pm »

Interest doesn't "compound" on a loan...unless you don't make your payments.

pjohns · « **Reply #3 on:** June 06, 2017, 07:12:02 pm »

Quote from: Hurricane Andrew on June 06, 2017, 06:47:45 pm

Interest doesn't "compound" on a loan...unless you don't make your payments.

If a loan is for, say, $10,000, and the APR is 3 percent, then that is more than the $300 that it would be if we just used APY to calculate.

Or do you believe that APR and APY are identical?

Drago · « **Reply #4 on:** June 08, 2017, 09:32:34 am »

Pretty much every quote I see for MM savings accounts or CD's adds the "APY" % to make the current pathetic interest rates seem a tiny bit better (Yellen!