High Interest Investment

What does it mean when a savings account says interest compounded daily?

I'm looking for a good savings account and I don't know what this means

Public Comments

1. It means that you're earning interest every day. The rate of return is your annual interest rate divided by 365. Savings accounts are well-insured, but money market accounts offer a higher interest rate in exchange for a little more risk.
2. The true yearly interest paid on a savings account is the annual percentage yield- APY. The APR, annual percentage rate, does not include the effects of compounding. The more often your invested money and interest earned is compounded, the higher your actual return for the year. Daily compounding is better than monthly since the added interest earned each day will be added to your total for the next interest payment. In order to best compare interest returns on savings accounts, look for the APY figure. Then regardless of their method, you can easily compare one accout with another. The attached link has more details.
3. What does it mean when a savings account says interest compounded daily? Well compounded daily means that your savings in that savings account earn daily interest. This is a plus point for a best savings account. In resource site you can get more information about Best Savings Accounts, plus and negative points.
4. its the best one can ask from the bank. in simple terms its means: money multiplier
5. It means that every day, they calculate how much interest you earned for that day. Compounded daily is better than compounded monthly or annually because the interest that you earn on day 1 will be added to the value of your account and that extra money will then also earn interest on day 2. Here's a simple example. If the interest rate is 3.65%, that means you're getting .01% (3.65% divided by 365 days in a year) every day. So if you have $1000 in the account on day 1, you earn 10 cents in interest for that day. On the second day you will earn interest on $1000.10 (the original $1000 plus the 10 cents interest from day 1). That "compounding" adds up over time. Usually they only actually add the interest to your account balance once a month, but their computer is keeping track of it and adding it on a daily basis.