Semi-annual rate

The semi-annual rate is the simple annual interest quotation for compounding twice a year.

For example if the semi-annual rate is quoted as 4%, then the periodic interest accruing is:

= 4% x 6/12

= 2% per six month period.

A semi-annual rate is an example of a nominal annual rate.

The semi-annual rate is not to be confused with the periodic rate per 6 months, which in this case is 2%.

Nor should it be confused with the related annual effective rate, which in this case would be:

= 1.02² - 1

= 4.04%.

See also

• Annual effective rate
• CertFMM
• Nominal annual rate
• Semi-annual basis
• Periodic rate of interest