When you deposit money in a savings account, CD, or money market account, you are really making a loan to a financial institution and deserve to be paid for the use of your money. Unfortunately, no institution is going to pay you any more than they have to, so it pays to shop carefully when you compare rates. Be sure to compare rates from banks with those of savings and loans and credit unions.

Making a decision about where to put your cash can be confusing, especially when bankers use terms like simple and compound interest, or effective yield, and combine such terms with different periods of time, such as semiannual, quarterly, or monthly.

Compound interest means interest on your interest. Each time the interest is figured, it is figured on the entire balance, including the principle and the interest from the previous calculation. You make the most the more often interest is compounded. If you have three possibilities, each with the same percentage of interest, but one compounds monthly, one weekly, and one daily, the account that is compounded most frequently will have the highest return.

Try to save your money where:

• interest is calculated using the day-of-deposit to day-of-withdrawal method.

• compounding of interest is done daily.

• you can get the highest annual percentage yield (APY).

• you have the lowest fees and fewest penalties.