if a bank account has 2% intrest compounded daily does that mean 2% of my annual intrest or 2% of the account balance?

From what I get of compounded interest, it's of your current interest you get 2% of. Correct me (anyone) if I am wrong though.

Normally its based of the Balance

Most intrest rates are APR/APY (Annual Percentage Rate/Yield)

Means they compound the current amount on the account every day
pretty much means more than the 2% a year. 2% compounded daily is more than one compounded yearly
Your getting 2%, but more

Most Daily compounded interest is usually based off

APR/APY that's Divided by 365days to give a Daily rate (2% ÷ 365 = 0.00547945) interest charged/earned per day

Or MPR (Monthly Percentage rate) that's divided by the number of days in the month (2% ÷ 30 = 0.06666667) interest charged/earned per day

http://www.bankrate.com/partners/sem/cd-rates.aspx?ec_id=m1052442&prods=19


these accounts say 2.xx% compounded daily

this
didnt have the type to type it all

Just reviewed ur link... CD rates are standard @ APY (Annual Percentage Yeild) so the intrest would be compounded daily @ 0.0054... DR(Daily Rate)

Unless that specific bank is going @ an unheard of 2% per day rate

The yield is on left, and the effective rate is on right
Means your rate will be 2.31% compounded daily, which is actually a yearly rate of 2.34%

This post was edited by Azenor on Jul 14 2011 04:09pm