Here's how much your money could grow if you put $10, $100, or $1,000 a month in a high-yield savings account
Added 12-13-19 06:14:02pm EST - “A good high-yield savings account can still earn up to 20 times more than a typical savings account and ideally doesn't charge maintenance fees.” - Businessinsider.com
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Posted By TheNewsCommenter: From Businessinsider.com: “Here's how much your money could grow if you put $10, $100, or $1,000 a month in a high-yield savings account”. Below is an excerpt from the article.
The best high-yield savings accounts live up to all the hype. After all, what more could you need in a savings account than no fees, zero risk, full liquidity, and excellent earning potential?
Whether you're building up an emergency fund, saving for a down payment, or preparing for your next Euro trip, it's hard to go wrong with a high-yield savings account.
Since the summer of 2019, the Federal Reserve has cut interest rates multiple times and the earning potential on savings accounts has dropped as a result, but many high-yield accounts, like Betterment's and Wealthfront's cash accounts, are still a great deal. If anything, the Fed's rate cuts serve as a good reminder to choose a savings account for all its features, not just the APY.
To see how an initial balance of $10 plus additional monthly contributions of $10, $100, or $1,000 would grow at in a high-yield savings account, we plugged the numbers into the compound interest calculator on Investor.gov. These calculations assumed an interest rate of 1.75%, compounded monthly. This rate is a good representation of the earning potential on some of the best high-yield savings accounts right now — Ally's online savings account earns 1.70% APY, Betterment's earns 1.78%, and Wealthfront's earns 1.82%.
Below, you'll see the total balance (your contributions plus your interest payments) at the end of one year. Note that the interest on this account is compounded monthly and we assume no withdrawals are made from the account.
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