How To Calculate APY APY = (1 + r/n)n – 1 r = interest rate n = number of compounding periods — daily compounding interest would be 365 Account Type Typical APY Range Liquidity Risk Traditional savings 0.10% to 0.40% Highly liquid Low risk — FDIC and NCUA insured High-yield savings 3.50% to 4.50% Highly liquid Low risk — FDIC and NCUA insured Certificate of deposits (CDs) 2.00% to 4.00% –depends on term Not as liquid — have to wait until end of the term Low risk — FDIC and NCUA insured Money market account 0.59% to 4.40% Moderately liquid Low risk — FDIC and NCUA insured Cash management account 3.00% to 4.80% Highly liquid Low risk — FDIC and NCUA insured Variable APY Go with a variable APY when interest rates are on the rise, and lock in a fixed APY when rates are high but expected to…