0
What is an example of an investment account where the interest earned is tax-exempt?
Wiki User
∙ 10y ago
There are several options that offer tax-exemptions on the federal level but not always on the state or local level. One example of an option that allows interest to be tax-exempt are municipal bonds. Tax laws vary by state so the tax-exemption may be void for a resident purchasing a bond in another state.
Wiki User
∙ 10y ago
Add your answer:
Earn +20 pts
What are some current account interest rates?
Depends on the countries, current account interest rates can be different. For example, one bank can have a 0.35% where other bank has a rate of 0.5%.
How much interest would you make if you had 5 million pounds in the bank?
This would definitely depend on the bank, the investment plan and how long you intend to leave it in the bank. For example, if you invest it in a safety account at the bank, and agree not to touch the capital - i.e. just have the interest paid out, say, every 3 months - you could possibly get as high as 5% apr. that's 250,000 per year.Of course, you could get higher interest in a high risk investment plan, or lower interest in a government guaranteed retirement fund.However, in my dream of winning the lottery, I am fairly conservative and prefer to invest it with an annual option of retaining my investment - so it is not tied up for 10 years if I want to buy a house. This type of investment usually bring about 5% in Europe.
Is interest income taxed when received or earned?
Interest income is considered taxable when earned. For example, if your savings account accrues interest, it is taxable at the time of accrual even if you are not utilizing the funds within the account. However, if you are accruing interest on a treasury bond that you have not yet cashed, the interest is not taxable until the bond is cashed and you receive the funds.
What are the disadvantages of personal savings?
A main disadvantage of personal savings is, in the case of notice accounts for example (Notice Accounts), that your money is often tied up for a specific period of time and cannot be accessed without incurring large penalties. Additionally, if your account does not have a fixed interest rate, the interest rate you are offered can diminish over time, thus lowering the investment return on your savings. Similarly, if you have a fixed interest rate and the basic interest rates rise, you could be earning less on your savings than if you had a variable interest rate.
What is the interest earned?
Interest is a certain amount of money added on top of what you already have. For example: If you had £1000 in your bank account, and the bank added 5% interest, you would gain £50 free from the bank for keeping that £1000 in your bank.
What is an example of interest-bearing account?
An Interest bearing account is a bank account in which, the banks pays you an interest for keeping your money deposited in that account. Ex: Savings Bank Account - You usually get around 3.5% rate of interest on the money you hold in your savings account in India.
What are some current account interest rates?
Depends on the countries, current account interest rates can be different. For example, one bank can have a 0.35% where other bank has a rate of 0.5%.
Define accrue and due?
In financial or banking term, there is a subtle difference between interest accrued and interest due. for example, if you open a saving account, the interest start accruing as soon as you put any amount of money in the account. However, there may be rules for this account, saying for example, that you will get the interest only if you leave the money at least 3 months in the account. If you need urgently the money and withdraw it from your saving account before the 3 month period has passed, then you will not get any interest on this money. The interest has accrued on your account, but it is not due, because you withdrew the money to early. Example: 3-month Saving account, 12% interest per year (1% per month): - 1st of January: open account and deposit $1000 - 1st January to 28th of February: interest accrues on the $1000 - 1st of March: withdraw $500: half of the interest accrued is lost - 1st of April: withdraw all the money from the account: - the remaining $500 + the interest due for 3 months on $500 (because this amount stayed at least 3 months in the account) I hope this helps, Excel-Hocam
What are the example for Finance cost in profit and loss account or income statement?
Interest on Loan
What is the formula for finding the annual payment for an investment?
Principal x Rate x Time. For example: $180,000 (cost of investment) x 0.067 (6.7% interest) x 30 (years)
Example of unearned revenue?
Unearned revenue is income that you get without having to work for it. An example of this would be interest from stocks and bonds, dividend payments, or interest earned on a bank account.
How much interest would you make if you had 5 million pounds in the bank?
This would definitely depend on the bank, the investment plan and how long you intend to leave it in the bank. For example, if you invest it in a safety account at the bank, and agree not to touch the capital - i.e. just have the interest paid out, say, every 3 months - you could possibly get as high as 5% apr. that's 250,000 per year.Of course, you could get higher interest in a high risk investment plan, or lower interest in a government guaranteed retirement fund.However, in my dream of winning the lottery, I am fairly conservative and prefer to invest it with an annual option of retaining my investment - so it is not tied up for 10 years if I want to buy a house. This type of investment usually bring about 5% in Europe.
What return can you expect on a 1 million dollar investment?
In investments and finance there is no guarantee of a positive return on any investment. Even in a low risk certificate of deposit, for example, the interest maybe be several points at most. Even here the return is not guaranteed as the FDIC will only insure up to 250,000 per account. If the bank was to became insolvent, it would represent a 75 percent loss, minus any interest accrued. Lastly, the effects of inflation will further devalue any gains made by interest on the initial capital.
Is interest income taxed when received or earned?
Interest income is considered taxable when earned. For example, if your savings account accrues interest, it is taxable at the time of accrual even if you are not utilizing the funds within the account. However, if you are accruing interest on a treasury bond that you have not yet cashed, the interest is not taxable until the bond is cashed and you receive the funds.
Why does interest on checking accounts increase with increasing inflation?
Example : you have Rs. 100 to spend you have invested in bank . the bank give you 5% interest so that now you will earn 105 Rs. on your investment. current inflation is 2% that means you are paying 2% and your bank gives you 5% so (5-2) 3% is your profit you are generating extra Rs. 3 on your investment in bank Now the inflation rate increases to 6 % and your bank still gives you 5% on the checking account while investment made in mutual fund gives you return of 8% than Bank (5%-6%)= Loss of 1% Mutual Funds (8%-6%)= Profit of 2% So to overcome effect of inflation and to stay in the competition with other investment and to regulate banking operation the bank will increase interest on checking account to keep investors investing in bank.
What is accured interest?
Accreud interst is interst payable that has not been paid yet: Double entry: Debit : Say Laon Interest Account Credit: Interest Payable Account Accrued Interest: This is the interest which we have earned but not yet received. Example: If there is a contract that we will receive the interest on money landed to somebody of $ 1200 at the end of the year then after 1 month we have earned the interest of $ 100 but not yet received so we will show that $ 100 in the asset side of balance sheet as accrued interest. The above is Accrued Interest Income. Similarly, you can have Accrued Interest Expense. So, using the above example, if you were the borrower, at the end of the first month you would debit Interest Expense for $100 and credit a liability account called Accrued Interest.
Why should a consumer know and understand the rule of 72?
Rule of seventy two is used to ascertain the period by which an investment would grow by 100%. 72 divided by rate of interest would provide the approximate period by which the investment would become double. As an example, if the rate of interest is 6% per month, the investment would be doubled in ( 72/6) 12 months. Rule of 72 thus is an important tool to know the investment horizon.
