Interest rates matter a lot in the world of savings accounts. If you’re looking to save your money and invest it, then you need to get the highest possible interest rate on your savings. A savings account with high interest can make all the difference in how much money you have at the end of each year. But there’s more to it than just wanting a high-interest rate.
What is an interest rate?
Interest rates are the amount you earn on your savings. They are expressed as an annual percentage rate (APR), which is the amount paid in interest over a period of time.
The APR represents a single index that measures how much money you would earn on your savings account, and it includes both your interest earnings and any transaction fees associated with opening or maintaining your account. The higher this number is, the more money you will make from keeping funds in this particular bank account.
Why does interest rate matter?
Interest rates are the amount of money you earn on your savings, and they’re important because they affect how much money you earn on your savings. They’re also important in that they affect how much money you’ll have in the future.
However, it’s worth pointing out that interest rates have been lower than usual over the past few years due to low inflation and slow economic growth worldwide.
Savings accounts and compound interest
A savings account is a type of deposit account you can use to save money. It’s a great place to keep your excess cash, and it will earn interest over time. The interest rate on a savings account is known as the yield or APY (Annual Percentage Yield).
The yield is the amount of interest earned annually on your deposits, expressed as an annual percentage rate. Interest rates are typically higher than what you’d get with a checking account because banks want to encourage customers to choose savings accounts over checking accounts for their long-term storage needs.
With SoFi advisors, “Finances are always at your fingertips.”
How can you get the best savings-to-account interest rate?
In order to find the best savings account interest rate, you’ll want to compare the rates offered by multiple banks. Some of the highest interest rates can be found at online banks like Ally Bank and Capital One 360. Credit unions also offer higher-than-average rates, so consider opening an account with one if you have one in your area. Just make sure that opening an account with a local credit union is worth it for you—not all of them offer great deals on their checking and savings accounts. If this sounds like a lot of work, just compare some of the top national bank offerings below:
Knowing what interest rate means and the best way to get the highest savings to the account interest rate is important. This can help you save more money for your future goals or emergency fund.