Going fishing for highest interest savings you enter an ocean full of promises.
Banks, investment houses and even private individuals all need funds. They promise that they can offer you the best interest rate.
When comparing interest rates remember to check whether the rate is a simple or a compound rate. Simple interest calculates interest on the original cash invested. Compound interest calculates interest on the original cash and the interest that is earned in the term. That is interest on interest (if the interest is reinvested). We will run through both simple and compound interest formulas in another article.
Look at how often the interest is calculated in the term. This is very important when looking at compound interest rates. The more frequently the interest is calculated the greater the compounding. We will look at this in detail when we go over the interest rate formulas. To help you compare compound rates you can use a savings calculator.
All interest savings products have risk attached. A consultant who tells you there is no risk in a product should be questioned. Even guaranteed products are only as secure as the company insuring it.
Watch out for people or companies promising very high interest rates. They may be a scam. Many people involved in fraud try to get money out of people by offering high interest rates.
At times people you know may even come to you asking to loan money at a higher rate. Often people do not enter into written contracts with people they know. You could land up having endless excuses when trying to get your money back.
We will be taking a closer look at different interest earning products in the market. First discussing them separately then comparing them against each other. Please note that this is a discussion on “Highest Interest Savings” and not financial advice.
Reference for: Highest Interest Savings