Help with monthly saving interest rate?

Question

I just opened a new saving account which says i get 3.125% interest monthly.

The min opening balance is 250KWD so i opened it with that amount. I was just wondering if someone could tell me how much i would/should get monthly if i kept it at 250 KWD and did not with draw.

Thanks

Answer 1

There is no account that pays 3.125% interest monthly.  It's very easy to get confused with the terms.

What you have is an account that pays you 3.125% interest annually, but chooses to pay you a little bit of that each month.

Roughly, divide the interest rate by 12, then multiply the result by your average balance, and that will be the amount you are paid.

Answer 2

If you are correct that you are earning 3.125% monthy, compounded monthly, then you are looking at 250 * .03125 = 7.8125. for the first month.

250 + 7.81 = 257.81 * .03125 = 8.0565.  Etc.

Now, if 3.125 is your APR (annual percentage rate) compounded monthly, you divide 3.125 by 12 = .002604

250 *.002604 = .651 .  Month 2, 250.65 * .002604 = .6527.  So when you get your first statement see if the interest is closer to 8 or .65.  That will tell you whether the interest rate is the monthly or APR.