BANKING AFFAIRS

Detailed explanation-1: -Savings accounts can earn interest one of two ways: through simple interest or compound interest. With simple interest, you earn interest only on your principal-the amount you’ve deposited into your account. But compound interest allows you to earn interest on your principal and the interest you’ve already earned.

Detailed explanation-2: -Interest on a savings account is the amount of money a bank or financial institution pays a depositor for holding their money with the bank. In a way, a bank borrows money from their depositors by using the deposited funds to lend money to other customers.

Detailed explanation-3: -Certificates Of Deposit With The Highest Interest Rates A CD is a type of savings account that typically offers a higher interest rate than a traditional one. And while the interest rate on CDs can vary, some offer rates as high as 5.00% APY.

Detailed explanation-4: -But who’s going to pay you to borrow your money? For many people, opening a savings account is one of the easiest ways to go about this. When you put money in a savings account, the bank is technically borrowing the money and paying you interest in return.