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 Staff
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FAQ's
APY vs APR
After hours deposit
options
1099 questions
Phishing
Reg D
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Why is the APY different
from the APR?
APY (annual percentage yield) and APR (annual percentage rate) are common
terms in the financial industry - but what do they mean and how are they
calculated?
APR in usually seen in relation to loans, and APY in
relation to interest bearing accounts.
Here's the definition for APR from
InvestorWords.com: "The yearly cost of a
mortgage, including interest, mortgage insurance, and the origination fee
(points), expressed as a percentage."
And here's the definition for APY: "The effective annual
return. The APY is calculated by taking one plus the periodic rate raised to
the number of periods in a year. For example, a 1% per month rate would
offer an APY of 12.68%."
The APY is an important number for investors because it
tells you what to expect from the interest rate, taking into account how
often interest is applied. For example, you open a $10,000 CD that pays
6% interest. If the interest is compounded/applied just once a year, you'd
earn $600 at the end of the year.
Unfortunately it's not that simple because most interest
compounds more frequently, such as monthly, weekly or even daily. For
purposes of our example, lets say your account compounds interest monthly.
In this case, you'll end up with more than $600 at the end of the year
because when the first month's interest was added, you immediately had more
than $10,000 in your account - after just one month! So, each month
when the interest is calculated, it is on a slightly bigger principal. The
more often interest is compounded, the more money you'll end up with
(although the difference may be small). If your APR is 6%, and your interest
is added monthly, the amount you'll end up with in two years works out to be
an APY of 6.17%.
Sometimes you'll see APR used to reflect a basic interest
rate on an interest-bearing account, with a corresponding APY listed,
showing what the effective rate is.
The interest on our CD's is calculated on maturity, so if
you have a CD with a term longer than 1 year, the APY will be less
than the APR because the interest paid/received is not compounded, it is
calculated when the CD reached maturity.
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I need to deposit money into my account and I can't get
there during regular business hours. What are my options?
There are night drop boxes/slots at both the main office
and the branch in Reeve. These items are posted to your account as
soon as we get in the next business day. Another option is to make a
deposit in any ATM machine BEFORE 6 PM CST, and the transaction will post to
your account the next morning. Transactions after 6 PM CST will be
delayed one full business day.
If you need to make a loan payment, simply log into your account on
home banking before 8 AM on any business
day and make the payment there. Home banking transactions are
downloaded each business morning and posted to your account. Please
note that the interest is calculated each evening after your account is
updated online, so if you are paying off a loan, the amount may be off a few
cents. Of course, you can always call the credit union (920) 424-3282
during regular business hours and we can transfer the funds to make your
payment for you.
One other (more expensive) option is to wire the funds from one account to
another. Fees will be charged on both ends, check with both financial
institutions for costs and availability.
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I didn't get a 1099 for interest received on my savings
account last year - why not? 1099's are mailed out by
January 31st. You need to maintain a balance of at least $100 in your
savings account to be paid interest, and you need to have earned at least $10 in
interest for the year to get a 1099. If your December statement shows the
interest for the year is more than $10 and you have not received a 1099, please
contact our office.
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What is Phishing? In the
"old days" fishing meant heading out to the lake to catch a fish.
Today, we also have "phishing" which is based on the traditional fishing
concept of using bait, except now it is to a person in the form of an e-mail
message and hoping they will take the bait and enter personal information
about themselves. There are very few, if any, places that will ask for
information about you that they already have.
If you receive an e-mail from a place that you do business with, and they
are asking for personal information and you aren't sure if it is legitimate
or not, there are several ways to find out:
First of all, NEVER
click on any link in the e-mail. Go directly to the site for the place
the message is supposedly from and check on your account from there.
Often the "real" company will have a notice on their home page if they are
currently a target of a phishing scam.
Another way to tell is to look at the
e-mail address of the sender. Does it look like it came from the right
place? Or, in most e-mail programs, hold your mouse curser over the
link in the message (without clicking on it) and look at the hyperlink
information that comes up by the cursor or at the bottom of your screen.
This should clearly tell you if the message is real or not.
If you still aren't sure if it's
real, call the company it supposedly came from, or send them an e-mail.
Most times, you can just delete the
message. If it is information that they truly need from you, you
should hear from them in a different way such as mail or by phone. As
stated before, businesses won't ask for information about you that they
already have.
You can report hoax e-mails online at
www.ic3.gov.
Test your phishing knowledge and more
at
www.onguardonline.gov
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What is Reg D?
- Reg D is a federal regulation that limits the number of withdrawals and/or
automatic transfers from Share Accounts to six per month
What is a share account?
What type of transactions from a share
account count against the six allowed?
The following have an unlimited amount of
withdrawals
If you exceed the transfer limits set forth
above in any statement period, your account will be subject to closure by
the credit union or to an excessive share withdrawal fee of $1.00 per item
(see the account disclosure information you received when opening your
account for complete details)
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