Compound Interest - Increase Your Savings
The power of compounded interest helps you increase your savings over time. Compounded interest means that your interest gets added to your principal and the next interest calculation is based on a higher balance.
So, for example, if you make monthly deposits of $100 at 4% interest, your balance at the end of year one would be $1200. If your account is compounded annually, then you will not earn any interest in the first year. At the end of the second year, you saved $2,448, which is comprised of $2,400 in deposits and $48 in interest. However, if your savings account is compounded monthly, then your balance at the end of the first year is $1222 and the end of the second year, $2,494. If you continue to save for 30 years, you will have 3% more through the monthly compounding calculation.
Compound Interest Calculator
Check how much you save over time using Bills.com Compound Interest Calculator.
Start with an initial deposit, then make monthly deposits. Set the interest rate and the amount of time you plan on saving.
Check how much your money grows based on different compounding periods. But, don't stop there. Make sure that you choose a saving plan and start today.
To discover the effect of compounded interest, calculate your savings based on a few initial inputs including:
- The Initial Deposit (or your Beginning Savings Balance)
- The Nominal Interest Rate Quoted.
- Compounding period: Daily, monthly, quarterly, semi-annual or annual.
Set Your Saving Plan - Let Compound Interest Work For You
It is clear that starting to save as soon as possible is to your advantage. Let your money work for you!
However, it may not be so obvious, but saving money helps you build your financial health. Are you saving enough? Check out Bills.com Monthly Saving Calculator to see if you are putting away enough money in your emergency fund, retirement account, and investment accounts. Keeping money in a liquid account helps you cover emergency expenses. Also, putting money away in special savings accounts enables you to build a down payment for a house, or pay for college.
Open a Savings Account Now
Start now, set a goal and open a savings account with an initial deposit and then commit to monthly deposits.