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Earning your own money

Lesson 43 · Written for kid, teen, and little

Savings Accounts That Pay More

Some savings accounts pay you a higher rate than others.

The idea

A savings account is a place a bank keeps money you are not spending right now. The bank pays you a little extra for keeping it there, and that extra is called interest. A high-yield savings account is simply a savings account with a higher interest rate than a basic one, so the same money can earn more. Rates change over time and are not promised forever, but comparing rates and fees is an easy habit that costs you nothing. 🏦

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Words to know

5

Savings account

A bank account for money you are not spending right now. Like an emergency fund you hope not to touch.

Interest

Extra money the bank pays you for keeping your money there. $500 at 4% earns $20 in a year.

Interest rate

How much interest you get, shown as a percent per year. 4% means $4 for every $100.

High-yield savings account

A savings account with a higher interest rate than a normal one. The difference between 0.01% and 4% on $500 is $0.05 versus $20 a year.

Fee

Money the bank takes from you for having or using the account. A $5 monthly fee wipes out $60 of interest a year.

Try it — no accountTrue or false

Swipe true or false about savings accounts.

Card 1 of 4

A high-yield savings account usually pays a higher interest rate than a basic one.

Swipe the card — or tap.

In the full lesson

  1. 1True or false
  2. 2Work out the number
  3. 3Make the call

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