Simple, Everyday Things You Can Do to Save Money How to Choose and Use a Checking or Savings Product

How a Small Savings Account Can Get Big Over Time

Here's how you can slowly build a large savings account and experience the miracle of compounding. Let's say you put money into a savings account that pays you interest every month. After the first month, the interest payment will be calculated based on the money you put in. But the next time the bank pays you interest, it will calculate the amount based on your original deposit plus the interest you received the previous month. Later, that larger, combined amount will earn more interest, and after many years it becomes a much larger sum of money. The earnings are called compound interest. You can earn even more in compound interest if you make deposits regularly and stretch to put in as much as you can and leave it untouched.