So i got into a disagreement with ChatGPT about whether you earn more interest overall if you contribute daily rather than monthly, if the overall contribution over 1 year is the same....
Without starting to calculate, or looking at the code, I’d say it’s obvious that an investment strategy where all of a month’s contributions are made on the first day of the month will be superior to one where you spread them out. Also, an investment strategy of making the month’s contributions on the last day will be inferior to spreading them.
So it’d really depend on how you time your monthly investments. If you can invest as soon as you get your monthly income, that’s probably the most beneficial way to do it.
edit — Taking a quick look at your code, that’s exactly what’s happening. In each period, ChatGPT invests first, then lets interest accrue, whereas you let interest accrue, then invest.
This is a good clarification. Indeed, ideally you’d want to put your money into that higher-interest vehicle as soon as possible, so basically, the same day you get paid.
In the limit, if you were to receive income once a year, you’d put that into savings immediately, which is maybe on January 1st, or earlier or later, depending on when your actual payday really is.
If you get a windfall, you’d also not want to let it linger on your current account for (next to) nothing, but put it to work as soon as is feasible.
for a savings account that calculates interest daily and pays interest monthly, is it better to contribute daily or monthly? ( lemmy.world )
So i got into a disagreement with ChatGPT about whether you earn more interest overall if you contribute daily rather than monthly, if the overall contribution over 1 year is the same....