What is annualized yield?
Yield or annualized yield represents your actual returns on investment over a one-year period, taking into account the effects of compound interest.
While you book an FD at a certain interest rate, your effective returns are often higher due to compound interest, which means you earn interest not only on your principal but also on previously earned interest.
When comparing FDs, annualized yield is a better indicator.
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How is annualized yield calculated?
Great question! Let's understand this with an example. If you invest in North East SF Bank's 3Y FD at 9% p.a., your investment will get quarterly compounded and earn additional interest, boosting your returns to 10.2% p.a. at maturity. This ...