Humans first encountered the ideas of compounding, the accumulation of small amounts consistently over a period of time, actually came from nature.
When humans first started settling in one spot and storing food in large quantities, mice would get into those food supplies. Once in the supplies, they would start multiplying. The same idea can be used to explain Compound Interest.
Compound Interest revolves around you putting a certain amount of your earnings into a bank account that will accumulate interest over time. You’re pretty much making money just by having money in a bank account. Although this way of making money seems simple, there are a couple of obstacles.
Human nature is the source of many problems, especially when you’re trying to leave money untouched in a bank account. Also, human nature can persuade people to try and invest in risky ventures which could result in a large capital loss. Over saturated markets can also decrease the earning rates banks are willing to pay.
American Express® High Yield Savings Account - You earn a competitive interest rate along with no minimum deposits or monthly fees. Amex High Yield Savings account has been my favorite Hub account for the past 7 years. Using this account to Pull/Push your money is absolutely necessary when you have many accounts. Here's why:
*No dollar limitations for ACH transfers - When you find a top bank rate account, you don't want to be limited to just $5K or $10K transfers. Amex Savings will let you transfers as much as you want whether you are pulling or pushing money from and to an external bank account.
*1 to 2 business days ACH transfers speed - With top-notch user interface, you get your money to another external account or pull money from another bank account within a day or two.
*No loss of interest during transfers - On the day you initiate your transaction on the high yield savings account website, the funds will be reflected in your Current Balance and begin earning interest.
Some other features from American Express High Yield Savings Account include Free Wire Transfers, 3 maximum linked accounts, and maximum 6 ACH withdrawals per month.
Savings account offers are frequently updated. Find the best nationwide Savings/Money Market rates here, and the best Savings account bonuses here. The Axos Bank and CIT Bank accounts offer great rates available nationwide which I recommend.
|Discover Bank Online Savings||$200 Bonus + 0.60% APY||Review|
|Aspiration||$150 Bonus + 1.00% APY||Review|
|Axos Business Savings||$200 Bonus + 0.20% APY||Review|
|Quontic Bank High Yield Savings||0.75% APY||Review|
|Axos Bank High Yield Savings||Up to 0.61% APY||Review|
|CIT Bank Money Market||0.70% APY + Amazon Prime Offer||Review|
|American Express High Yield Savings||0.60% APY as of 4/28/22||Review|
Successfully Using Compound Interest
- Invest wisely. Invest conservatively, heavily weighted toward government and corporate bonds with less than one-third of the total invested in a no-load mutual fund.
- Saving regularly. Put a certain amount into your bank account consistently.
- Don’t touch your money. Once you’re used to depositing money into the account, leave it there so that it can grow.
- Start small. Invest in one small thing that you’d want, such as a television, to help you practice saving for your future.
If you’re planning on opening a savings account, consider the possibility of taking advantage of Compound Interest! As long as you start saving early, enrolling in a bank that has high earning rates can ensure that your future is taken care of.
Retirement is an inevitable event that we must come to peace with, but it doesn’t have to be stressful or dull if you take advantage of this strategy early. If this information interests you, check out our Best Business Bank Bonuses and Best Bank Savings Rates to make the most out of your bank account. Take a look at our list of Credit Card Bonuses here on HMB!