Now that you know why you earn interest, let’s talk about how and when you earn interest on a savings account. Each savings account has an Annual Percentage Yield, which is the estimated annual rate of return, including compound interest. This percentage varies depending on what savings account you have, and may also be influenced by factors such as your average daily balance, what other accounts you have with the bank, and where you live. Your rate can also change at the bank’s discretion.
Interest is calculated on your account each day, and if you have a savings account with Santander Bank, credited to your account each month. At the end of each day, 1/365th of your interest rate, which is called your daily periodic rate, is applied to your account balance. At the end of the month, the interest that has accrued during that time period is added to your account. This amount will be reflected in your monthly account statement.