What is Derived Interest?
Derived interest is a broad term that is used to refer to any type of interest income that is obtained from some sort of investment. Not to be confused with dividends, derived interest is usually associated with any type of interest bearing account or investment strategy where the investors earns a fixed or variable rate of interest in return for placing funds into an account or purchasing a bond of some type. Investments yielding derived interest tend to be relatively risk free, although the return is usually somewhat low. One of the most common means of accumulating derived interest is by setting up accounts at a local bank. The savings account provides an easy way to accumulate interest over a period of time. Most savings accounts have a fixed interest rate. Periodically, the current balance in the account is evaluated and an interest payment is deposited directly into the account. While the interest derived is usually a small percentage, incrementally depositing small amounts of fu
