At $19,430 savings with 1.8% annually, the amount yields to $21,528.44 after six years. On the other hand, the deposits of $16,470 at 2.7% simple annual interest creates only $19,138.14. This means that the 2nd strategy works better than the first one. The situation where simple interest occurs naturally is when the principal doesn't change over time. This is true with an interest-only mortgage, for example, where your monthly payments only pay the interest on your loan, but don't pay down the loan itself.
