7 On Your Side: Simple ways you can increase your personal savings
NEW YORK (WABC) -- Experts are alarmed. Americans simply aren't saving enough.
The personal savings rate, the percentage of our disposable income that we save, recently dipped below 4%.
Ten years ago it was more than twice that.
So 7 On Your Side has looked into some simple ways you can boost your own savings rate. Here's what we found.
A basic savings account earns about .5% interest. So if you had $5,000 in there, your balance after one year would be $5023. You'd earn $23 in 12 months.
But if you moved that money to a high yield savings account with, say, 5% interest, after 1 year look at the free money you'd earn for doing nothing: $5256!
That's $233 more just for parking your savings somewhere else.
Here is a look from Bankrate at some of the best high-yield savings account interest rates.
Some online banks are really crushing traditional banking institutions with much higher interest.
SoFi offers 4.5% with no minimum balance required and no account fees - and offers an enticing $250 sign-up bonus for direct deposit.
CIT Bank, a division of First Citizens Bank, offers 5.5% interest if you keep at least $5000 in there.
But many of these, like BMO Alto, offer high interest for whatever amount you manage to throw into your savings account monthly.
Here's a perfect example of how easy it is to save hundreds of thousands of dollars by just saving $50 a week.
We're talking about a few less lattes or one less dinner out - it can pay off big time.
For example, if you are 35 years old, save $50 per week and invest that money in an S&P 500 index fund that earns on average about 7% annually, by the time you turn 60 you'll have $175,515.
It's even better if you're younger. If you are 25 and save and invest that same $50 per week, when you're 60 you'll have $390,228!
And that's just on saving $91,000.
You just need a little discipline and some time - and you can do it!
READ MORE | 7 On Your Side: Dream job or scam? How to spot employment red flags
----------
SHARE YOUR STORY
Do you have an issue with a company that you haven't been able to resolve? If so, 7 On Your Side wants to help you!
Fill out the form below or email your questions, issues, or story ideas by filling out the form below or by emailing 7OnYourSideNina@abc.com. All emails MUST INCLUDE YOUR NAME AND CELLPHONE NUMBER. Without a phone number, 7 On Your Side will not be able to respond.
