The Power of
Compounded Interest
Compound interest is the interest on savings calculated on both the initial amount you put in (the principal) and the accumulated interest from previous periods (interest on interest). That is the power of compound interest. It multiplies your money at a faster rate. The greater the number of compounding periods, the greater the compound interest will be. When you combine the power of interest compounding with regular, consistent investing over a long period of time, you end up with a highly effective growth strategy for accelerating the long-term value of your savings.
This is where High Yield Savings Accounts or HYSAs come in.
Below are a two of my favorite banks that give you a much higher interest than your typical bank while still giving you the FDIC standard protection. There are others but these two top my list for now.
Bank
Account Name
APY
Direct Deposit Welcome Bonus
Referral Bonus
Minimum Balance Required for APY
Grow your wealth with patience & interest
"Compound interest is the eighth wonder of the world.
He who understands it, earns it ... he who doesn't ... pays it.”
Albert Einstein
The average interest rate on a regular savings account is a mere 0.06%. Far less than what an HYSA account can offer. Remember: The higher the interest rate, the more you’ll earn on your savings.
High-yield savings accounts can help you grow your savings faster than any traditional savings accounts at your brick and mortar banks. Whether you want to build an emergency fund or put money away toward other financial goals, a high-yield savings account is a game changing option.
When choosing a HYSA, here are the factors you should consider:
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Interest rate offered, since it can impact your earnings potential
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Minimum balance required
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Direct deposit requirements
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Account accessibility as most HYSAs are online accounts
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Customer service
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Bank's reputation
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Overdraft protection
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Mobile check deposit and paper check deposit limit
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Limitation on the number of accounts you can have
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Ease of use (this takes a little while getting used to but it is easy once you do)
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Allocation capability - I like this feature on Sofi because it allows you to put money in up to 20 "vaults", name each one, assign a goal for the amount you want to save for each and auto populate. For example:
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End of year taxes: $5000 | Travel: $2500 | Emergency Fund: $3000
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Money coming into the account can be set up to automatically be split into each vault so you don't have to do it manually
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Begin Saving TODAY!