This College Grad’s Savings Plan to Earn Over $400 in Interest in 5 Years
My one-year “workiversary” is approaching in June, and I’ve saved more money than I’ve ever seen in my 24 years of life.
But I really don’t know what to do with this money I’m tucking away. I’ve teetered around with different options — investing it, saving it… burying it?
Like every other New Year’s resolution I set for myself, I still haven’t made a move — and it’s April. That money is just sitting idly (and temptingly) in my checking account.
I’ve heard a thing or two about high-yield savings accounts, which seem easy enough, so I take a deep breath and start poking around on the internet.
Let Me Tell You About My (Bad) Experience With Savings Accounts…
Before this full-time job, I was a student who earned an irregular income from freelancing, pet-sitting and tutoring.
At one point in graduate school, I’d somehow squirreled away a little bit of money, and I wanted to put it in a savings account.
I took the easiest route: I got on the phone with my bank, the one I kept my checking account with, and set up a savings account.
I didn’t really know what I was doing, so I just took the nice customer service agent’s advice.
I ended up with an account that required a minimum balance, which was right at what I had saved… which meant I couldn’t take any money out if I needed to.
After the first few months, I also realized I was only actually making a few cents with the 0.01% APY.
And so it went…
Each month, as my checking account balance dropped, I longingly looked at my savings. I didn’t want to pay any extra fees just for going below that required balance, so I ultimately had to shut the account down.
I just wasn’t ready yet, I suppose. But now I am.
I Found a Great Contender — with an Unsuspected Finance Company
I don’t want to go back to that 0.01% interest rate. I want to see my money actually work for me, so I start researching high-yield savings accounts.
I find some big names, including Goldman Sachs Bank USA.
Confession time: I’ve had this ridiculous idea that Goldman Sachs Bank USA is this brand that I, a starving writer, would never come in contact with. For me, it conjures images of gold bars and people who shop at high-end retailers, like Saks (Sachs?) Fifth Avenue.
That’s not me.
However, after combing through the fine print, I — and any “normal” person — could totally open a Goldman Sachs Bank USA savings account.
- It’s an online savings account, so I’m not limited by location. (Also, in my mind, Goldman Sachs Bank USA’s buildings have fancy marble floors, which just don’t jive with my yoga pants.)
- There’s no minimum deposit to open an account. Whew. There is a maximum amount of 250,000, but that’s a little out of my range right now.
- The interest rate is 1.19%, and the APY is 1.20%. For perspective, the national savings average is 0.06% (as of April 10, 2017).
- There are no transaction fees.
So far, it all seems pretty promising.
How Much More I Can Make With a Goldman Sachs Bank USA Savings Account
But I’m not very good with translating numbers in a big picture kind of way, so I use Goldman Sachs Bank USA’s online savings calculator, which, by the way, isn’t 100% guaranteed, but it’ll give you an idea of what to expect.
Say I want to start out with a $500 deposit and want to set my recurring deposits to $100 bi-weekly (which is when I get a paycheck). If I want to do this for the next five years, I could hypothetically put away $13,823 earning $423 in total interest.
That’s nearly $296 more than the national savings average.
Want to Check Out This Savings Account For Yourself?
If you’re in a similar situation to me — or are simply unhappy with how much you’re getting back from your regular ol‘ savings account, your best bet is to start researching.
And start sooner than later. Yeah, I’m preaching to the choir right now, but the faster you get your money in one of these high-yield interest accounts, the faster the whole compounded interest thing will work in your favor.
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Carson Kohler (@CarsonKohler) is a junior writer at The Penny Hoarder.