OK I am usually really good at math, but I need help. I have an ING account, but every month when I check my interest it doesn't come close to the 4.5% they claim. How do you calculate the interest you should be earning...I am thinking an equation or example. TIA.

It's 4.5% annually calculated on your average daily balance but distributed monthly.

I think monthly interest should be something like:

(average daily balance * 0.045)/(365 days in the year/days of the interest cycle)

It is:

principal x interest rate / 12 months.

Example:

You have $1000 in the account (on the day that they calculate the interest OR an average balance, whichever is their policy). Multiple by the interest rate of 4.5% which is actually .045. That equals: $45 in annual interest.

However, they are only paying for a month of interest so divide the total by 12. This results in $3.75.

Hope that helps.

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"I've been rich and I've been poor but independently wealthy is where it is at."

Thanks for the responses...It still only comes to be 2.6% interest. I am confused. Does the 4.5% mean over the year so some months it is less?

That seems like a big difference. I'd call or e-mail ING and ask for an explanation.

__________________
"I've been rich and I've been poor but independently wealthy is where it is at."

It depends if it is compounded monthly or daily and you have to take in account that the balance is going up so the amount added each month is going to be different.