Is it accurate to disclose that a 36 month CD, compounded and credited monthly, has the same annual rate and annual percentage yield?
No. If you compound monthly, the interest will be paid each subsequent month on a higher principal. The same “rate” applied to a higher principal is going to yield a higher amount of interest than the first month, and each month thereafter will be higher than the previous month. The final, annual percentage yield as calculated by dividing the aggregate interest over a year by the initial principal amount will be higher than the rate quoted.
Refer to the appendix to Reg. DD regarding calculation of APY:
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