7 On Your Side: Simple ways you can increase your personal savings

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Friday, October 13, 2023
How to best save money and stash your cash
Nina Pineda stops by Mornings @ 10 to give the scoop on saving money and stashing your cash.

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!

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