Savings accounts

There are several different ways that money can be made to multiply by itself. One of the most popular ones is a savings account.

Most banks offer this extensively and make the access to it as easy as possible. Unfortunately, savings accounts aren’t great investment products, as the interest given is often very low.

Pros

• Very low risk

Cons

• Low interest, money doesn’t grow quickly

Examples

As of today (Nov/2021) one of the largest UK banks offers a savings account with a gross interest rate of 0.05% per year.

Let’s look at what that means in a few years:

Calculation of how much money someone would have after some years have passed.

Here is a different scenario, where we start with no balance and have monthly deposits of 100.00:

Calculation of how much money someone would have after some years have passed.

These are different examples, and both show that the amount of interest that is made by leaving the money alone on a savings account is very little.

Disclaimer

I am not a financial advisor and cannot recommend any financial product or practice.

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