Thursday, September 28, 2006

High Interest Savings accounts

The first step toward getting rich is just making the right habits and decisions.  I'm going to try to post a step frequently that is a small change you can make that will add up over time.
This week's small step is opening a high interest savings account.
If you don't have a savings account you need one.  Any money that you don't plan to spend in the next few days can be put into your account, and you'll get interest based on how much money you have in it.  If you don't have a savings account, open one today! 
If you do have one, you might not be getting the best benefit from it.  Find a high interest savings account.  Some examples are Citibank and HSBC, both of whom are paying about 5.00% APY.  I compare this to my Bank of America account at 0.25% and my US Bank account at 0.35%.  If you have a savings account that is not paying that sort of interest, get one!  You can sign up online, transfer money online, and keep your existing accounts if you already have credit cards and checking.
Here's why you need to do it.  If you open an HSBC account with 1,000 dollars today, in a year you will have made $50 without doing anything!  If you left this money in your BoA (yes they are like a snake) account, you'd have made $2.50.  A big difference.  Now, you say, 50 bucks isn't that much.  I'd agree, but you then get interest on $1050 the next year, and $1102 the next year.  Over time this adds up to a huge difference.

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