How Savings Accounts and Interest Work

Illustration for the article: How Savings Accounts and Interest Work

Interest is the reward you earn for letting the bank use your money. Understanding it is the first step toward making your money grow.

Interest rate. A percentage the bank pays you each year. If you have $1,000 in an account paying 3% a year, you would earn about $30 in a year (the actual amount depends on how interest is calculated and how long the money stays).

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