Let’s talk about savings accounts. Why do you need one and how should you use it?
When you save money by keeping it in your wallet or in a piggy bank at home, your money is just sitting there. If you put it in a savings account, your money can turn into more money without you having to do any work!
When you put money in a savings account at a credit union or bank, a percentage of that money will be given to you – you can see it every couple of weeks, every month, or every year. Because of interest rates, the more money you put into your savings, the greater the amount that you will get in return. So if you put in $100 and the interest rate is 1% per year, then every year, without doing anything else, you will get $1 added to your savings. If you put in $1000, you will get $10, and so on.
It is good to put at least some money in, even if you just put in all the money you got for your birthday and leave it alone. Even better would be to regularly put money into your savings. Put a reminder for yourself to deposit $5 into your account every two weeks, or $25 every month, or whatever fits best for you. You will see the extra money from your allowance or your job grow and grow in your savings account!