How to make money if you put money into your account
The bank will pay you for every dollar you keep in your savings account.
The money the bank pays you is called interest. How much the bank pays can change from month to month. The amount the bank pays is talked about as a percentage.
Why does the bank pay you? The bank wants to use your money to make loans — that is, lend people money.
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People often borrow money from the bank to buy expensive things, like houses and cars. Here's how it works.
Neat, huh? So banks make their money by working with both savers and borrowers. Savings are safe Don't worry — whenever you give money to a bank, the federal government insures it.
It's very safe. If you leave your money in savings Let's say that Uncle Henry gave you the money when you were 10, but told you that you couldn't withdraw any of the money until you are 19 and ready to go to college.
Use the Compounding Calculator to see what will happen if you save on a regular basis. Have fun!.
Image source: Getty Images You have money, you need a place to put it for a while and the financial institutions are lining up at the door. You may be tempted to fall for whatever suitor makes a good first impression, but remember: This choice is all about you. Interest: How much will the institution pay you for babysitting your money, and does the amount you need to park in the account qualify for the best rates? Service: Might you require bells and whistles, such as in-person customer service, or are you more of a DIY, low-maintenance customer? Now, let's review the major aspirants: Checking accounts Checking accounts are meant for transactions, not savings.
Checking accounts are not savings accounts. You do not earn interest on most of these accounts. You use checking accounts to hold money to cover common expenses.
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