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Economics Discuss Did anyone suppose that we would not notice? at the Political Forums; For many years, banks (and other banking-type institutions) gave APR (annual percentage rate ) on savings. They also charged APR ...

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Old 05-31-2018, 08:33 PM
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Default Did anyone suppose that we would not notice?

For many years, banks (and other banking-type institutions) gave APR (annual percentage rate) on savings.

They also charged APR on their loans.

Even today, they charge APR on their loans
.
Yet they give only APY (annual percentage yield) on savings.

In short, the first is compounded; the second is not.

Did they really imagine that no one would notice?
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Old 05-31-2018, 08:42 PM
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Default Re: Did anyone suppose that we would not notice?

Quote:
Originally Posted by pjohns View Post
For many years, banks (and other banking-type institutions) gave APR (annual percentage rate) on savings.

They also charged APR on their loans.

Even today, they charge APR on their loans
.
Yet they give only APY (annual percentage yield) on savings.

In short, the first is compounded; the second is not.

Did they really imagine that no one would notice?
You need a link or better backup to your claim. Not saying you're wrong, but I haven't heard of those changes. I think you are talking about two different things.
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Old 05-31-2018, 08:51 PM
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Default Re: Did anyone suppose that we would not notice?

Quote:
Originally Posted by pjohns View Post
For many years, banks (and other banking-type institutions) gave APR (annual percentage rate) on savings.

They also charged APR on their loans.

Even today, they charge APR on their loans
.
Yet they give only APY (annual percentage yield) on savings.

In short, the first is compounded; the second is not.

Did they really imagine that no one would notice?
Not much incentive to start a savings account anymore anyway with the low rates.
But I wouldn't doubt they put the screws to even that piddling rate.
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Old 06-01-2018, 06:26 AM
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Default Re: Did anyone suppose that we would not notice?

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You need a link or better backup to your claim. Not saying you're wrong, but I haven't heard of those changes. I think you are talking about two different things.
https://www.investopedia.com/persona...ll-difference/

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Old 06-01-2018, 10:20 AM
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Default Re: Did anyone suppose that we would not notice?

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I get the difference between APR and APY and other methods of calculating interest. If you are looking for a place to park your money or spend your money or borrow somebody else's money it pays to examine each option. Depending on the circumstances, either one or the other can be right for you at a given time. Choose wisely.

An example: Credit card interest is both costly and varies widely. The worst is starting balance calculating. Basically if your starting balance is $1000 and you pay $500, you get charged interest on $1000. A bad deal? Not necessarily. I have one of those cards. I always pay it off monthly. No interest charge at all. The other perks on the card make it worthwhile.
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Old 06-01-2018, 10:59 AM
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Default Re: Did anyone suppose that we would not notice?

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Originally Posted by jimbo View Post
I get the difference between APR and APY and other methods of calculating interest. If you are looking for a place to park your money or spend your money or borrow somebody else's money it pays to examine each option. Depending on the circumstances, either one or the other can be right for you at a given time. Choose wisely.

An example: Credit card interest is both costly and varies widely. The worst is starting balance calculating. Basically if your starting balance is $1000 and you pay $500, you get charged interest on $1000. A bad deal? Not necessarily. I have one of those cards. I always pay it off monthly. No interest charge at all. The other perks on the card make it worthwhile.
I understand what you are saying regarding credit cards, but that wasn't what the OP was about.

IMO, the OP was about the difference in the terminology used in regards to money in, versus, money out. Most people don't know there is a difference or how it's calculated.
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Old 06-01-2018, 11:28 AM
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Default Re: Did anyone suppose that we would not notice?

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Originally Posted by GottaGo View Post
I understand what you are saying regarding credit cards, but that wasn't what the OP was about.

IMO, the OP was about the difference in the terminology used in regards to money in, versus, money out. Most people don't know there is a difference or how it's calculated.
I agree many do not know how to calculate interest. Many do not seem to care.

But why is that the problem of the lender? In every lending transaction, you are given full financial disclosure prior to signing the documents and in many cases you get 3 days after to rescind. That includes you lending to the bank.

The OP was about differences in how interest is calculated. In my mind that includes all interest. That it's calculated differently in different comes as no surprise.

BTW, a lot of those differences occur due to government dictates.
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Old 06-01-2018, 12:28 PM
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Default Re: Did anyone suppose that we would not notice?

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Originally Posted by jimbo View Post
I get the difference between APR and APY and other methods of calculating interest. If you are looking for a place to park your money or spend your money or borrow somebody else's money it pays to examine each option. Depending on the circumstances, either one or the other can be right for you at a given time. Choose wisely.

An example: Credit card interest is both costly and varies widely. The worst is starting balance calculating. Basically if your starting balance is $1000 and you pay $500, you get charged interest on $1000. A bad deal? Not necessarily. I have one of those cards. I always pay it off monthly. No interest charge at all. The other perks on the card make it worthwhile.
I thoroughly agree with you as concerning credit-card interest. (I have said previously that a credit card may charge 99 percent interest, for all I care, as I simply do not pay any interest, since I pay off my credit card in full each month.)

But I do consider it disingenuous--perhaps "sneaky" would be a better word for it--for banks to have changed APR to APY, when it suits them. Banks should not be in the business of attempting to snooker their customers.
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Old 06-01-2018, 12:47 PM
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Default Re: Did anyone suppose that we would not notice?

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Originally Posted by pjohns View Post
I thoroughly agree with you as concerning credit-card interest. (I have said previously that a credit card may charge 99 percent interest, for all I care, as I simply do not pay any interest, since I pay off my credit card in full each month.)

But I do consider it disingenuous--perhaps "sneaky" would be a better word for it--for banks to have changed APR to APY, when it suits them. Banks should not be in the business of attempting to snooker their customers.
I have no idea why or if banks change their method of calculating interest. I've been out of the banking business for years. If they do, I would be interested in why, particularly if I had a loan or savings or checking account in the bank.

But without particulars, I wouldn't call it sneaky or disingenuous. I'd need more information on that particular transaction.

I do know that when I was involved in banking a lot of time was spent trying to make yesterdays bank transaction compatible with today's new government regulation.
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Old 06-01-2018, 07:33 PM
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Default Re: Did anyone suppose that we would not notice?

Quote:
Originally Posted by jimbo View Post
I have no idea why or if banks change their method of calculating interest. I've been out of the banking business for years. If they do, I would be interested in why, particularly if I had a loan or savings or checking account in the bank.

But without particulars, I wouldn't call it sneaky or disingenuous. I'd need more information on that particular transaction.

I do know that when I was involved in banking a lot of time was spent trying to make yesterdays bank transaction compatible with today's new government regulation.
well you'd be bowled over if you've been out awhile. As with most professions, it ain't yer grandpa's store anymore
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