That’s over 12% APY. I think you’re either getting scammed or full of it.

Sorry, I should have been a lot more clear when I wrote this post last night.

1% compounded monthly is what I intended to say, as opposed to compounded continuously or yearly.

You mean 1 percent annual return compounded monthly?

Or 1/12th of a percent monthly return compounded monthly?

1% APY compounded monthly, which is roughly below inflation. And it's taxed of course.

Isn't your second statement the same as the first? 1200 dollar balance returns $1 per month, or $12 per year?

Technically (1 + (x/12))^12 != (1 + x)

In this case where x = 1% (or .01) they're so close it almost doesn't matter. For x = 10% it's a lot clearer.

That said, it's also not equal to (1 + y) ^ 12, where y is whatever value is needed to have (1 + y) ^ 12 = 1 + x.

That is an exception, not the rule. If you have Chase, Citi, BofA, etc. it’s been like .01% for 10 years.

If you're willing to move your funds to another institution, check out https://www.depositaccounts.com to see how much you could be earning with your money.

Consumer banks barely pay anything. It’s awful. I moved all my long term cash to online banks and investment accounts.

I understand where you are coming from, but my bank has something like 100B USD in assets under management, so I think such a plan is available to millions of people

Where are you getting 1% monthly? I’m getting like 2% yearly from Ally.

Where? Even with something like Lending Club, overall ROI bounces between 7-10% depending on default rates.

If you're getting 12% annually on anything, count me in.