Factors that determine the dollar yield on an account:
Interest rate (also called rate of return, or annual yield)
All money earned comes from this factor.
The following factors reduce money earned and can even turn it into a loss: Fees, charges, and penalties
- Typically based on minimum balance requirements, or transaction fees.
Balance requirements
- Some accounts necessitate a definite balance before paying any interest.On money-market accounts, the majority of banks will pay different interest rates for different size
- Balances. (Higher balance earns a higher rate.)
Balance calculation method
- Most calculate daily. Some use average of all daily balances.