Why do you want the highest Interest Rate you can find for your savings account?

When it comes to savings, a higher interest rate is the name of the game. It means a better return on your money. The interest rate is what the bank will pay you for the privilege of keeping your money.

Explanation:

For example, it's not uncommon to get a. 01% interest rate on a traditional savings or checking account, while interest rates on high-yield savings accounts can range anywhere from 1% to 1.35%. Here's how that difference plays out in real life based on a balance of $10,000 after one year, assuming no additional deposits.

Type of savings account / Interest rate / Balance after one year (based on

monthly compounding)

High-yield savings account / 1.35% / $10,135.84

Traditional savings account/.01% / $10,001

That's a difference of about $135 a year - nothing to scoff at - but that gap starts to widen the minute you make monthly deposits to boost your savings.

For example, if you made $100 monthly deposits - the equivalent of $1,200 a year - your year-end monthly balance on the low-interest savings account would be $11,201.06, compared to $11,343.29 with a high-yield savings account. Over time, this adds up.