In fact, many big banks like Chase and Bank of America have relatively low rates on their savings accounts. Interest rates in general have been rising, but you won’t find high savings interest rates at every financial institution. It’s important to know that interest rates can vary quite a bit by banking institution. This is what can really add to your money’s growth over time. The more often interest is compounded, the more interest you’ll earn. Compound interest essentially means that your interest earns interest. You will also have to specify whether the account compounds interest daily, monthly, quarterly, semiannually or annually. You can find an account’s rate on SmartAsset's savings account comparison page. You’ll enter this number into the calculator to see the rate at which your initial deposit and any other potential contributions grow. Of course a big part of your savings growth is your specific account’s annual interest rate (APR). Annual Interest Rate and Compounding Period: Account Specifics Entering your recurring monthly deposits into the savings calculator will give you a look at how these deposits can boost your returns. Not only are you setting aside more money, but you also add to the principal that accrues interest. Additional Contributions: Ongoing SavingsĪlthough not required, making additional contributions into your savings account will help your savings grow faster. Making a larger deposit does allow your money to grow more than, say, a $50 original deposit. You can deposit as much or as little as you want into the calculator but beware that some savings accounts have minimum deposit requirements. You’ll enter this number into the calculator as your starting point. Your starting savings balance is the initial, or principal, amount you deposit into your account. Starting Savings Balance: The Initial Deposit To find a financial advisor who serves your area, try our free online matching tool. Whether you are building up an emergency fund or saving for a specific goal, a savings calculator can help you see what you need to do in order to get there.Ī financial advisor can help you incorporate your savings into your financial plan. You can set a specific financial goal and see how much you need to contribute each month to reach it or you can set how much money you are able to afford to contribute each month and then see how long it will take you to get there. It can also help you determine how much money to deposit, whether to make monthly deposits and more. ![]() This will help you make a more informed decision on which savings account you might want to open. You can easily change the interest rates, deposits, frequency of interest compounding and the number of years you have to save. It can help you compare and contrast your potential savings for different scenarios. "If you currently receive 0.5%, 1%, or even 1.25% from your current savings account versus 4%+ from high-yield savings, the difference, over time, would be substantial.Using a savings calculator allows you to see how fast your money will grow when put in an interest-earning account. "Now that rates increased, there is more of a benefit to making this move," says Jim White, CFP, EA, founder of Great Oak Wealth Management. It's just one more reason you should switch to a high-yield account today. High-yield accounts are one of the easiest ways to grow your savings, and the latest Fed rate increase makes them worth even more. Ready to get a high-yield savings account? Get started here! The bottom line You may not earn as much if interest rates go down, but your initial balance won't be affected. Plus, unlike products like stocks, you won't lose your initial deposit in a savings account if market conditions change. So even if your bank fails, the government protects your money up to that amount. They're protected by FDIC insurance up to $250,000 per bank, per account (or NCUA insurance for the same amount for credit unions). They're safeĬompared to more volatile financial products, such as stocks, high-yield savings accounts are a safe place to keep your money. For example, many online banks offer low or no maintenance fees or minimum account balances. These banks have less overhead than traditional brick-and-mortar banks, which means their costs are lower and they can afford to provide better terms to their customers. ![]() ![]() Many high-yield savings accounts are offered by online banks.
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