EQ Bank Savings Plus Account
Interest rate of 1.5%
- Zero everyday banking fees
- Free transactions
- No minimum account balance
To see the strongest returns on your savings, you need to compare more than just interest rates. How and when an account pays you interest can greatly affect your savings potential. Compound interest is a magical tool – the more frequently your balance earns interest, the more quickly your savings grows; the longer your money sits, the more powerful compound interest becomes.
Say you put $5,000 into a savings account for your child when she’s born, and the account has a 1.5% interest rate compounded monthly. By the time she’s old enough to go to university, she’ll have over $6,500 to put towards anything she needs – you would’ve made an extra $1,500 without even touching the account.
If the same amount was held in the account for 65 years to create a modest nest egg for retirement, and if you added $10 each week to boost your savings, you’d have over $66,000 by the time you retire. Interest alone would’ve almost doubled the amount of money you would’ve put into the account prior to retiring. And if you increase the amount you set aside each year by 3% to account for inflation… you’d have $149,000 by the time you retire! That’s over $50,000 earned in compound interest.
Compound interest is among the best ways to make your money work harder for you, helping you to reach your savings goals more quickly. As the examples showed above, compounding can increase a small amount of money today into a large balance over 10, 20 or more years.
And you don’t need to be an investor to take advantage of it — anyone who can put away money can benefit from compound interest.
To get the most out of compound interest, deposit as much as you can into your account and limit any withdrawals from it, whether for bills or fun money. The more that’s deposited into your account by the end of the month, the more interest you’ll earn.
Even if you can’t deposit extra money into your account, your balance continues to grow as your interest compounds each month.
In the context of lending, interest is the cost of borrowing money. When you take out a loan, you typically pay interest as a percentage of the principal amount at an agreed upon rate.
When it comes to savings accounts or investments, interest is the money you earn for allowing the bank, credit union or other financial institution access to your money and invest it. When you deposit your money into an interest-bearing account, you’re effectively lending money to the bank.
Pooling together its members’ money is how banks and other lenders provide loans to borrowers, among other banking activities. Technically, even though the bank invests the money its customers put into their accounts, everyone still has access to the full amounts they’ve put into their accounts (within the limits of their account agreements, of course).
The assumption is that customers won’t want to withdraw all their funds at the same time, a dreaded event known as a “bank run.” Bank runs can shut down banks and ruin people’s savings if the bank doesn’t have enough money that’s not lent out or invested elsewhere to give everyone their withdrawals.
In order to prevent bank runs and manage cash flow safely, banks sometimes put holds on deposits and withdrawals. This helps prevent too many transactions, especially high-value transactions, from hitting the bank all at once.
Many factors play into the amount of interest you ultimately receive, including:
The interest rate is often expressed as an annual percentage. The higher the interest rate you’re offered, the stronger your return.Back to top
Your provider should prominently advertise the monthly variable interest rate under the product description for the particular account you’re looking at. It’s how they entice you to do business with them, and not a competitor.
If you’re not sure where to start, read our guide on high interest savings accounts to find out how you can find the best savings account for you. Note that interest rates are often variable, meaning they can change according to the prime interest rate.
Compound interest is an incredible tool. But it’s only one element to consider when shopping for a savings account.
To get the most out of an account with compound interest, start saving as early as possible and avoid unnecessary withdrawals.
Want to get top rates on your car loan? Compare lenders using this online car loan broker.
Enjoy a decent return on interest for no monthly fees with this top-rated US dollar savings account.
Earn interest on your savings for no monthly fee with this popular BMO bank account.
Earn an accelerated interest rate when you deposit $200 per month with this innovative savings account.
Enjoy 12 free transactions per month for one low monthly fee with this basic chequing account.
From making a business plan to getting funding and insurance coverage – we’ll walk you through what you need to know about starting your own business.
From registration and financing to bank accounts and business insurance – here’s a step-by-step guide to setting up a sole proprietorship.
Want to find the best rates for your next personal loan? Compare lenders with this well-known online platform.
Earn interest on your savings and pay no monthly account fees with this basic account.
Earn a high interest rate on your US savings and pay zero monthly fees to sign up for this account.
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.