Video: You’ll Earn More Your Savings Through Compound Interest

You work hard for your money, now it’s time to make that money work for you.

One of the simplest ways to do this is through compounding, where you’ll keep earning interest on your interest over time.

Here’s how compound interest works:

It all starts when you put money into some type of savings - such as a regular savings account or a CD, or an investment option such as a retirement account.

Say you put in $5,000 that earns 3% annually and you leave it for 20 years.

At the end of the first year, you will earn $150 in interest, which brings your savings to $5,150.

In year 2, you’ll earn interest on that amount and your money will grow to about $5,304. And that money will keep growing each year.

So at the end of 20 years, your savings will be about $9,030. That means you will have earned over $4,000 in interest!

And if you keep adding money to your savings each month, you’ll see your earnings grow even more. By starting with $5,000 and putting an extra $200 in your account each month, you’ll end up with more than $73,519 in 20 years.

That means time really can equal money, and the sooner you start saving regularly, the more you’re going to have in the future.

Stop in and talk to us about your options to learn how saving money today can make a big difference in the future.