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When the term 'interest rate' is used, by default does it mean compound interest unless specified otherwise?

At this link : http://www.rbcinvestments2.com/actiondirect/remote_fixedrates.html they use the word 'interest' many times, so that got me wondering.

W.r.t the above link, 2 more questions:

Why such a huge difference between Registered minimum purchase and non-registered min purchase?
Under : Cashable GIC - Interest Paid Annually, for 2 years, the interest rate is 0.00?

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  • that is strange...interest rate of 0.00? Who invests in that and why?
    – Muro
    Commented Apr 18, 2011 at 17:54
  • 3
    Isn't 0.00 the same whether it's compound or simple? :-)
    – corsiKa
    Commented Apr 18, 2011 at 20:25
  • @Muro: 0% bonds are reasonable; they're of course sold at a discount. This is sensible in tax regimes without capital gain tax. Also, it reduces the administrative overhead, as there's no need to track bond ownership until maturity.
    – MSalters
    Commented Apr 29, 2011 at 10:21
  • If it is 0%..then there will be no gains...so what is the relevance of non-zero capital gains tax?
    – Victor123
    Commented Apr 29, 2011 at 16:05
  • @Victor123: you could buy a zero coupon bond at discount, say at 80$, and then redeem it at maturity at 100$, thus having 20$ capital gains (taxable in a jurisdiction with capital gains tax).
    – Fab
    Commented Apr 21, 2014 at 18:00

1 Answer 1

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Unless otherwise stated interest is always simple interest (non-compounding).

In the case of investments you are given the option of reinvesting earnings (turning it from simple interest to compounded interest).

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