Growing Money: Investing Can Be Rewarding, but It's Also Risky
A savings account is a great place to store your money at first. It’s safe and it pays a little interest. But it won’t make you rich! Growing your money requires that you move some of it into investments with a potentially higher rate of return.
Many financial experts suggest that your money should be growing somewhere between 5% and 10% per year. You won’t get that from a savings account these days.
Just compare $100 in a savings account earning 1% interest per year with an investment earning 5% per year and another earning 10% per year.
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At 1% interest, your investment won’t increase much. After 20 years, you will have $122.02.
With a 5% return, you more than double your money to $265.33.
And with a 10% return, your money grows more than six times to $672.75!
However, investments aren’t insured like your savings account. You take the risk of losing everything if your investment becomes less valuable.
Federally Insured by NCUA. Equal Housing Lender.
