Interest
Interest is the money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt. How can that benefit YOU however? Well, when you put money into a bank, you are essentially lending the bank your money. Therefore, they would pay you interest for you lending them the money. However, it is not only banks that can give or charge interest.
For example, you can lend a friend $20 because they forgot their dues for a club. The next day, they would pay you back $20, with an additional $5 as a sort of "thank you" for lending them the money. This is basically how interest works.
How Do You Get Banks to Pay you Interest?
It's easy! Many bank accounts will pay you interest for depositing money. You put money into a savings account that pays 2% interest annually and don't touch it for a whole year. By the end of the year, you earned an extra $20 at no cost to yourself! The longer the money sits, the more you earn too! There are different types of interest however, such as those that compound. Make sure you ask your bank what type of interest you'll get!
The bank can pay you interest for keeping your savings in an account with them, which grows your savings over time. And the longer you keep your money in a savings account, the more interest you will earn. Through savings and interest, a person can meet their goals almost effortlessly.
For example, you can lend a friend $20 because they forgot their dues for a club. The next day, they would pay you back $20, with an additional $5 as a sort of "thank you" for lending them the money. This is basically how interest works.
How Do You Get Banks to Pay you Interest?
It's easy! Many bank accounts will pay you interest for depositing money. You put money into a savings account that pays 2% interest annually and don't touch it for a whole year. By the end of the year, you earned an extra $20 at no cost to yourself! The longer the money sits, the more you earn too! There are different types of interest however, such as those that compound. Make sure you ask your bank what type of interest you'll get!
The bank can pay you interest for keeping your savings in an account with them, which grows your savings over time. And the longer you keep your money in a savings account, the more interest you will earn. Through savings and interest, a person can meet their goals almost effortlessly.