Leah Kelvin
Active member
Savings account interest rates are the rate of interest a bank or financial institution pays you on your savings account. It is an additional amount added to your balance and increases your total savings with time.
Usually, they are represented as annual percentage rates (APR) on savings accounts. In case, let’s say a particular saving account has 2% APR, then you will be paid 2% in relation to the principal amount over that year.
Here is what some things about saving interest rates should be noted:
1. Interest Rates Change: Interest rates vary from one banking institution to another and could change over time. To ensure that you get the best possible return for your money, it is important to compare different banks’ interest rates periodically.
2. Compounding Interest: There are two types of saving account interest: simple and compound. Simple interests are calculated on principal amount only while compound interests take into consideration both the principal and the accumulated interest. Compound interests can help grow your savings at a faster pace over time.
3. APY vs APR: APY stands for Annual Percentage Yield which includes compounding while APR stands for annual percentage rate without factoring in compounding income earned from investments is better reflected by APY than APR.
Usually, they are represented as annual percentage rates (APR) on savings accounts. In case, let’s say a particular saving account has 2% APR, then you will be paid 2% in relation to the principal amount over that year.
Here is what some things about saving interest rates should be noted:
1. Interest Rates Change: Interest rates vary from one banking institution to another and could change over time. To ensure that you get the best possible return for your money, it is important to compare different banks’ interest rates periodically.
2. Compounding Interest: There are two types of saving account interest: simple and compound. Simple interests are calculated on principal amount only while compound interests take into consideration both the principal and the accumulated interest. Compound interests can help grow your savings at a faster pace over time.
3. APY vs APR: APY stands for Annual Percentage Yield which includes compounding while APR stands for annual percentage rate without factoring in compounding income earned from investments is better reflected by APY than APR.
