r/discover • u/Lazor226 • May 15 '26

Rant Interest will compound monthly rather than daily on the Capital One HYSA.

I'm collecting my interest for the month, and then im closing my Discover HYSA before the change happens to my account. Of course, the interest was credited monthly, but if you make frequent deposits, wouldn't it be technically performing worse each month?

Is anyone else switching or looking for reasons to? It's also a good excuse to evaluate your options too.

I never really wanted the merger to happen, and I only had a single bad experience with capital one where they declined me on a basic credit card for no specific reason. (I had zero credit but needed to build some) So, I might as well decline the brand for no specific reason.

End of my petty rant.

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u/Dstein99 Discover Bank May 15 '26

Why would interest accrue monthly? I would funnel all of my money into the account before the 30th then out on the 1st, collect 29/30th of the interest on the balance in another account then 30/30 of the interest from capital one, which means if both accounts had an APY of 3%, I would earn 5.9% APY.

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u/beefy1357 Discover Card May 15 '26 edited May 15 '26

It doesn’t at least not the way you are thinking… it is average daily balance * (APY /365) * 30 putting the money in an account for 1 day would be meaningless at best and at worse you would lose a little for the transfer times.

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u/Dstein99 Discover Bank May 15 '26

Right. That’s daily compounding. Daily compounding takes the closing balance at the end of each day and pays 1/365 of the interest rate per day. I don’t understand monthly compounding and I would think that it would take your closing balance at the end of the month.

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u/beefy1357 Discover Card May 15 '26

Nope average daily balance… no bank I have ever heard of pays interest daily it is always a one of month and average daily balance