Hey kids! Did you know that banks pay you a little extra money for keeping your money in a savings account? It's called interest!
This is like getting a reward for saving! But the amount you get depends on the interest rate. Think of the interest rate as a percentage of your money that the bank gives you back each year.
Recently, some banks have changed their interest rates.
- The average interest rate is pretty low right now, but some banks offer much higher rates.
- If you have $1000 in a savings account with a low interest rate, you might only get a few dollars in interest.
- But, if you have the same $1000 in an account with a higher rate, you could get more than $40 extra!
| Interest Rate | Money Earned (on $1000) |
|---|---|
| 0.41% (average) | About $4 |
| 4% (high-yield) | About $40 |
