Beverly Butler: Hi! I am Beverly with Wells Fargo & Company. Today we are discussing how to increase your savings by taking advantage of compound interest. I'm starting a savings plan that's right for you.
Saving is key to financial independence and building wealth. You can think of saving as giving a gift or paying a reward to you. The money you save gives you so many benefits like cash in an emergency, the ability to buy big things like a car.
Building up huge amounts won't happen over a night, but it will happen if you make it a habit, make it automatic and stick with it over time. So you can take full advantage of the power of compounding interest. Remember, compound interest pays you interest on your original deposit plus it pays you interest on the interest you've already earned. It keeps building and building.
A great place to save is at the savings account with a bank or other financial institution. It helps your money grow with interest and your account is insured by the FDIC up to the applicable limits. Many financial institutions offer online savings plans that make it easy to set up an automatic savings program and allow you to monitor as often as you want.
You can start by setting a savings goal such as education, retirement, car purchase, vacation, home purchase or other. It may be a good idea to assign one goal to each of your savings account and open a new account for each additional goal you have. Then, you can set the amount you want to say and use the benefit of compounding interest to calculate the end date for completing your goal.
The great thing about online banking is you can easily monitor and track your program toward your financial goals. A savings plan that takes advantage of compound interest is a powerful way to make your money grow faster and help you on the road to achieving your financial goals.