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In 2000, ING direct launched the first successful savings account
online due greatly in part to offering an interest rate four times
that of the national average on savings accounts at the time. Since
then, I have rarely seen in the average online savings account to
be less than five times the national average.
Many people balk at savings accounts in general. They rarely see
the difference that a single point of interest makes on a savings
account. With a total of 15 minutes, you could receive a five times
better interest rate. This is not exciting to most, but when you
look at the logistics of a five times better interest rate those
15 minutes can be some of the best financial minutes of your life.
Interest rates fluctuate and that will continue through time. If
you take a minute and look at what a five times better rate can
do for you, over a lifetime, you will be amazed. If I were to maintain
a modest savings account of $5,000 over 30 years lets see the difference!
The national average for interest rates untraditional savings accounts
over the last 10 years is 0.4%. If the online trend continues to
be five times of that, you would have a 30 year interest rate of
2%. Assuming the interest was compounded monthly, you would amass
$9,106.04 with an online savings account. If you were to stick you're
your traditional savings account you would amass $5,637.37. That's
a difference of $3468.67. While this is not a huge chunk of change,
it will only take you 15 minutes to do this.
If the trend in online banking stays as such, we are fools to give
our money to traditional savings accounts.
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