Are Savings Accounts Worth It?

In this blog post I will help you answer the question Are Savings Accounts Worth It. When I talked to friends about how you can make more interest with you savings account they look at me and say “What?”. If you find this blog post helpful then share it with someone else that can benefit from this.

Are Savings Accounts Worth It?

Let’s begin..

Regular Savings Account

What I mean by regular savings account is the one you get when you open a checking account with a bank. These accounts will only pay you little in interest for having money in the account. For example, I once had $3,000 in my savings account and when I looked to see how much they gave me in interest, it was $0.30. I thought this was the coolest thing because the bank was giving me money to keep my money in savings. Of course that was until I saw a video on YouTube of people explaining how you can make way more interest with a savings account.

I was only told only that opening a checking and savings account with a bank was good and not the part about how high interest yield savings accounts can help you make more money long term. For the readers that are barley learning about this, no it is not a scam. I am not going to sell you a course on “Are Savings Accounts Worth It”. I’ll explain these accounts in the next section.

High Interest Savings Account

Savings accounts that pay high interest is something that you should definitely open up when trying to grow your nest egg. instead of just getting paid pennies from a regular account, you will get way more at the end of the year. This is because High Interest Savings Accounts pay you by the annual percentage yield. Let’s start with some examples to show you why you should open one.

Let’s say you put $500 into a Savings account with an APY of 1.80%. You decide that you can make monthly contributions so after one year you will have $508.57. You just made $8 in 1 year instead of pennies. If you put $10 every month, you would have $629.68. That is $29.68 that you made by just investing a little bit into your savings account. in 5 years, it will grow to $1,170.99.

The only thing note is that APY does fluctuate and will not remain the same. If you want to do some calculations yourself then go to NerdWallet or Bankrate.

I hope this post has given you a better understanding about high interest savings account and helped you further gain knowledge in personal finance. Thanks for supporting The Finance Starter and make sure to read other post that i wrote below.