Compound Interest Accounts - Aussie Stock Forums

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  1. #1

    Default Compound Interest Accounts

    Ive been reading around and i have read that some people say that compound interest accounts go up to 25% compounded annually. Is this true because i can find NO proof of this, the highest ive found is 6%.

  2. #2

    Default Re: Compound Interest Accounts

    No doubt there are people and funds that have made 25% or more in the past year. But they're not "safe" investments like cash in the bank. Their profit comes at the risk of loss.

    If anyone's paying 25% on cash then to me that suggests that they are a VERY risky bank/company/person to be depositing funds with. Why else would they pay so much to borrow your money when loans are readily available at one third of that rate? Because nobody will touch them...

    Either that or it's a foreign currency denominated account in some third world backwater. In that case there's the risk of political revolution, currency collapse etc. They wouldn't be paying 25% versus 6% for banks in Australia if it were comparably "safe".

    That's not to say that you can't make 25% per annum, but I'd be very wary of anyone claiming to be able to consistently do that with little or no effort on your part and without real risk of losing all of your money.

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