As the Federal Reserve has raised interest rates to try to cool inflation, some banks have improved their terms for savers as well. While the biggest national banks have yet to dramatically change the rates on their savings accounts (clocking in at an average of just 0.23%, according to Bankrate), some mid-size and smaller banks have made changes more in line with the Federal Reserve's moves. Online banks in particular which save money by not having brick-and-mortar branches and associated expenses are now offering savings accounts with annual percentage yields of between 3% and 4%, or even higher, as well as 4% or higher on one-year Certificates of Deposit (CDs).
A viral TikTok video claims to reveal a banking hack so you'll "pay a big fat zero in interest". Sadly, it's not true. But extra payments now can save you thousands, writes Sagarika Mishra.
okay, let us stop here for a second because compounding interests can be pretty tricky to understand. here is what you need to know. while most loans make you pay a small amount of interest, compounding interest charges you interest on interest, making your balance grow exponentially and quickly get out of control. if i were the only person with student debt, i may say, you know, gosh, i really messed up here. but then, when it gets like 45 million people, i m like, okay, maybe this is systemic. maybe this isn t just a couple of people who made bad decisions. maybe this is actually an orchestrated spam. i m convinced that the system was rigged to create the very crisis that we are in today. that is when i learned about a piece of this puzzle and that got very little attention, but would change everything. if you could point to one thing about the student debt system, one thing you would change, what would it be?
i started when she was in kindergarten. i was very young when i had her. i did not know she was going on to go for her masters. i was not prepared for that. i did not know that she was one are gonna want to go to law school. but once she told me about, it i just encouraged her, i m, like yes, what do you need to do? when marcellus mother needed to do was taking out a 46,000 dollar loan. i m trying to work with her because, after she finishes it s going to be over $200,000. wait a minute. marcella started out with a 46,000 dollar loan and now it s john doe thousand dollars! most of my salary is going into paying off my student loan during now but even with that after four years of residency i m going to be in $50,000 more debt. i have talked to people and they say, i have been paying my student loans for years, and i making all my payments, on time. and yet, i owe more now than i did at the beginning. what is that? that is the phenomenon of compounding interest.
these cases where, um you see that mother you know, but i think this about about the police case we just reported on a while back in memphis, and we saw the mom on tv there. it s just your heart breaks. when you see these parents and family members and especially mama s on television. when they just they just haven t been given the ability to close these matters to understand these matters. and they ll never really put it behind them, but to sort of have to live your life in a shroud of i have no idea what happened here, the compounding interest of that on your sorrow of losing a child. i can t even begin to fathom. and so i think this family deserves all the investigation. anybody can give them so that they can get the truth anybody should want and i mean, and of course, there are false leads called in all the time. i mean, unintentionally, people think that they re drawing a connection, and they call in to the police and they had their sure of it and they have a lead, but the evidenc