How to Earn Money by Saving Money

How saving works – it's all about interest

Most of the time, you have to work to get money. But you may not know that your money can work for you – everyday. That's a good deal! It's all about interest.

Banks will PAY YOU interest on money you deposit with them. Why should they do that? Because they want to use your money to make loans to other people. Learn more about how banks work.

The interest rate that banks pay is a percentage that rises and falls as the economy changes. But know this: the bank pays you interest for every day you let it use your money.

There are two kinds of interest

• Simple interest is calculated on the amount of money you deposit.
• Compound interest is more powerful. This interest is calculated on your deposits plus any interest you've already earned. So the interest the bank paid you last month now becomes part of your new total, and you earn interest on that money too. Your money is growing all by itself. And you don't have to do anything but keep your money in the bank. It's that easy!

When the amount of money you have deposited in the bank – or in an investment – gets larger, compounding gives you spectacular results. See for yourself and let the Compounding Calculator do its magic.

Watch interest grow

With the power of interest behind you, you can double your money. Want to know when? Use the Power of 72 and find out!

How long will it take you to become a millionaire! The Millionaire Calculator shows you. Learn more about real life millionaires, it may surprise you.