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My uncle told me to put $100 a month into a high-yield savings account

Honestly, I thought it was too small an amount to matter, but I started doing it with an online bank last January. Tbh, I just checked and there's over $1,200 in there now, which is way more than I expected from just saving. Has anyone else had a simple piece of saving advice actually work out for them?

3 comments

3 Comments

blair_gibson781mo ago

StellaDavis, that $1,200 is all money you put in.

stelladavis1mo ago

Wait, hold on. That's actually not a great return when you really look at it. A high-yield savings account might give you 4% right now, so on $1,200 that's only about $48 for the whole year. If you had put that same $100 a month into a basic index fund tracking the S&P 500, you'd have closer to $1,250 just from your money going in, plus maybe another $80 or more from market gains last year. The savings account is safe, sure, but it's barely keeping up with prices going up. You're leaving a lot of potential growth on the table for that safety.

patkelly22d ago

Remember my buddy who kept all his cash in a savings account? He finally moved some to an index fund last year and made more in a few months than years of interest.