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How your money can grow in an improved savings account with better returns



The best high-return savings points live up to all the hype. After all, what more could you need in a savings account than no fees, zero risk, full liquidity and excellent earning potential?

Whether you are building an emergency fund, saving for a down payment or preparing for your next Euro trip, it is difficult to go wrong with a high-return savings account.

Currently, Betterment's online investment platform offers an industry-leading annual percentage rate of return (APY) of up to 2.39% on its high ROI account if you join the checking account waiting list. Otherwise, the interest rate is 2.1

4%.

Betterment debuted its daily savings account this summer with an eye-popping 2.69% APY, though it did not last long. Less than two weeks later, the Federal Reserve announced a one-quarter percentage rate cut, and Betterering also reduced interest rates – a good reminder to choose a savings account for all of its functions, not just APY.

Despite the fall in interest rates, Betterement's high return account still earns up to 25 times more than a regular savings account. You need an initial deposit of $ 10 to open the account, but it's free of charge, allows unlimited transfers and is FDIC insured up to $ 1 million.

To see how a starting balance of $ 10 plus additional monthly contributions of $ 10, $ 100, or $ 1000 would grow to the highest interest rate that improvement currently offers, we linked the numbers to the interest rate calculator at Investor.gov.

Below you can see the total balance (your contributions plus your interest payments) at the end of one year and at the end of three years. Note that interest rates on this account are compounded monthly.

Yutong Yuan / Business Insider

Also note that the calculation assumes a constant APY of 2.39%, although it is unlikely that this will remain the same for up to three years ago interest rates are variable.

Takeaway: The more you save, the more you earn. Although there are rules of thumb for how much you should save in retirement accounts and in your emergency fund, financial planners recommend starting where you can. No amount is too small and once you have started it is easier to continue.

To make savings feel effortless, consider setting up automatic transfers from a checking account or even directly through your payroll provider. When you save the top, you quickly adapt to living on less.

The Betterment Everyday Checking account is ready for availability later in 2019 and will have no maintenance or checkout costs and no minimum balance. The account comes with a Visa debit card and Betterment will refund all ATM fees for account holders.

Learn more about improving everyday savings account »


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