Ignoring This Simple Move Could Cost You $486 This Year
Written by
Jennifer Taylor
Edited by
Nick Friedman
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Who couldn’t use some extra money? With the rising cost of living, we all could stand to see some extra cash in our bank accounts. Here’s the thing: Too many people don’t take advantage of one of the easiest ways to earn passive income.
It all comes down to where you choose to keep your hard-earned money. And if you’re using a regular old bank account, it could be costing you some serious money — as much as $486 this year alone.
Put Your Money to Work — It Could Earn You $486 This Year
The average bank account isn’t paying much interest these days. The national average interest rate on a savings account is just 0.46% APY. Your money could — and should — be working much harder for you.
Compare that to a savings account with Milli Bank, which offers Annual Percentage Yield on its savings account, as of February 29, 2024. That’s more than 11 times the current national average.
Here’s why it matters. Earning a APY on your savings account balance can add up fast. For example, if you put $10,000 in savings in a Milli account, here’s what your balance would look like over time:
One year: $10,486.43
Three years: $11,531.42
Five years: $12,680.55
10 years: $16,079.65
20 years: $25,855.50
As a reminder, this is all money you’ll earn without lifting a finger. These numbers are pretty staggering, so don’t miss out on the chance to cash in.
The Power of Compound Interest
Earning interest on your money is always great. However, it’s even better when the interest is compounded.
Compound interest allows you to earn interest on the money deposited into your account, as well as the interest you’ve earned over time. Even better, Milli Bank’s savings account compounds interest on a daily basis, meaning your savings account balance grows daily — but is paid on a monthly basis.
The frequency that interest is compounded is definitely something to pay attention to. You might be offered the same APY on two different accounts, but if one compounds interest more frequently than the other, you’ll ultimately earn more from it.
On the other hand, some savings accounts only pay simple interest. In this case, you only earn interest on the money you invest.
Knowing the difference is crucial. For example, if you invested $10,000, at a simple interest rate of , your balance would be $11,425 after three years — compared to $11,531.42 with compound interest.
Clearly, where you choose to put your money matters. Opting for a savings account that doesn’t pay compound interest can cost you hundreds or even thousands of dollars.
Save More With Milli
Opening a Milli Savings Account isn’t just a way to earn money — it’s also a way to save. You’ll pay no fees and have zero account minimums to worry about.
The money you deposit into your account will stay there until you take it out. This makes sense, because you shouldn’t have to pay for a safe space to store your funds.
Milli is also FDIC-insured. Your deposits up to $250,000 are safe and secure, allowing you to save with confidence.
Sure, you might be able to gain higher returns in the stock market, but you risk losing your funds during a downturn. You might also be able to get a competitive rate on a CD, but you won’t be able to touch your money until its maturity date.
A Milli Savings Account offers the best of several worlds — a low-risk investment, the ability to earn a competitive interest rate and full access to your money.
An all-around win, this is a great way to grow your savings to a level that might not otherwise be possible.
The Bottom Line
Choosing the right savings account is a big deal. Overlooking key details such as APY, compounding frequency and account fees can cost you.
Milli makes it easy to grow your savings as quickly as possible. Since the AP*Y is more than 10 times the national average yield for savings accounts, you’ll be able to earn significantly more interest than with a standard savings account.
Ready to start earning passive returns on your savings? It’s easy to get started. Sign up here to start earning APY* on your savings.
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