Student life is often characterised by expenditures. Whether it is spending on books, excursions, accommodation, fees or recreation; money has a tendency of going out and seldom returning. It is therefore uplifting to note that there are ways whereby money can be returned to you for pretty much nothing.
Yes, you heard right. What if you could get something back without having to get another job, running errands, doing chores, nagging your ‘rents or writing to your sponsor that you would please like an advance? Chances are you can earn yourself some interest with a savings account.
As with all things banking, terms and conditions apply. It’s best to consult a banking or financial service provider to hear about the nitty-gritty details.
Earning interest with a Savings account
Now that you are pretty much a young adult, you could continue to store your spare cash in the cookie jar or piggy bank, under the bed and in socks. Or you can get on board with the rest of the world by tapping into the banking offerings. In short, a savings account is pretty much one of the simplest types of banking accounts which enables you to store cash securely and rewards you by earning daily, monthly, quarterly or annual interest (all depends on the fine print).
There are various types of savings accounts, all of which have different requirements and levels of return. In certain types of accounts, you could be required to keep a minimum amount (of let’s say R1 000) in your account and have access to your money anytime you want it. While other savings accounts may require a 32-day notice before you can have access to your funds.
Unlike when you save a R100 note in a cookie jar and return to find R100 after a year (if the thieves or your one of your roommates haven’t located it by then), banks can pay you interest on the money you have saved. So in essence, you could leave R100 in your savings account and return to find that it has grown slightly (it’s important to note that there may be a monthly fee for the banking account which will be subtracted from that R100) over the time that it has been invested.
In essence, one should note that money earns compound interest when the interest that it has earned is added to the original deposit each time it is calculated. The interest you receive varies depending on your service provider and the package you have opted in for. For example, you could be looking at up to about 5% growth on the savings account… sometimes even 0.01%. Yet would your trusted cookie jar offer you that? Nope.
The conclusion is that an account with a good interest rate makes your money work for you, while you study to further your chances at earning more money to save in the future!