Seven-day annualized rate of return
What does the seven-day annualized rate of return mean? It is the average income level of the monetary fund in the last 7 days, which is obtained after annualization. For example, the annualized rate of return of a monetary fund is 2% on the same day, and assuming that the income of the monetary fund in the next year can remain unchanged at the level of the previous seven days, then you can get 2% of the overall income if you hold it for one year. Of course, the daily income of the money fund will constantly change with the operation of the fund manager and the fluctuation of the money market interest rate, so it is unlikely that the fund income will remain unchanged for one year in actual operation.
At present, the average annualized rate of return of domestic money funds is about 2.5%, while the benchmark interest rate of one-year time deposits is 1.50%. As a cash management tool with excellent liquidity and safety, money fund is still an ideal substitute for short-term savings.
However, at present, some small and medium-sized banks issue bank smart deposit products through cooperation (sales) with the Internet platform, which has the advantages of high liquidity (interest can be paid in installments or withdrawn in advance) and higher interest rate than ordinary time deposits. The interest rate is around 4%-5.5%, which is still very good. For example, there are some smart deposits issued by banks on Xiaoman Financial APP platform, such as "Zhongbang Duobangli" bank deposit products, which bear interest by file, with a maximum withdrawal rate of 5.0%, which is transferred to value on the same day, regardless of holidays, and arrives in real time on the day of withdrawal. Cash withdrawal is supported at any time, and there is no limit.
Calculation formula of seven-day annualized rate of return
Want to know what the seven-day annualized rate of return means? You must know the formula for calculating the annualized rate of return for seven days.
Because under different income carry-over methods, the calculation formula of seven-day annualized rate of return is also different.
At present, there are two ways to carry forward money market funds: one is "daily dividend, monthly carry forward", which is equivalent to daily simple interest and monthly compound interest. The second is "daily dividend, carried forward by the day", which is equivalent to daily compound interest.
The formula for simple interest is (∑ RI/7) × 365/10000×100%, and the formula for compound interest is (∑Ri/ 10000) 365/7× 100%.
Among them, Ri is the earnings per 10,000 shares on the latest I-th Gregorian calendar day (i= 1.2...7). The seven-day annual yield of the Fund is rounded to three decimal places.
What does the seven-day annualized rate of return mean? Simply put, the seven-day annualized rate of return refers to the average income level of the monetary fund in the last seven days, and the data obtained after annualization. Calculating the annual income only by referring to the income of the last seven days is essentially a historical rate of return and does not represent the future income of investors.