Can bank bonds pay in compound interest? and Young Bond Girl

Can bank bonds pay in compound interest?

I went the bank and asked the financial adviser to help me purchase bank bonds that pay in compound interest. She said that the bank bond don't have the option to compound interest. I am not sure is she lying to me or can bonds not pay in compound interest. I asked her if mutual funds pay in compound interest and she said that I have the option, so I purchased 10000 worth of mutual funds.


Bond best answer:

Answer by Common Sense
You're concerned about compound interest with $ 10,000?

Let's look at rates:
A 1.97% CD compounds to 1.99%..... So in the first year you've earned an extra $ 2 on your entire balance due to compounding.

With Mutual Funds the idea that they're "compounded" interest is a stretch at best. 99.9% of Mutual Funds can lose money (there is risk)..... what good is compounding if you have less money at the end of the year?

Compounding Interest is just about the last thing to look for in an investment. You need to understand what you've purchased. Banks are horrible places to buy Mutual Funds from.... and you are a perfect example as to why.

READ:
Investing For Dummies
Mutual Funds For Dummies

Bond

Young Bond Girl


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