Answer:
Interest on savings accounts is expressed in percentage terms. For example, let's say you have $1,000 in the bank; the account might earn 1% interest. ... However, if you reinvest the interest you earned on your savings account and the initial amount deposited, you'll earn even more money in the long term.Interest rates on savings accounts are calculated on the average balances in the account on a daily basis. This interest is however paid monthly, annually or quarterly as per the policy of the bank.All banks charge interest on all their loans and advances at monthly intervals, which means the interest earned by them gets compounded every month, where as the interest paid on all deposits is compounded at quarterly intervals.Banks do the lending for you: They use your money to offer loans to other customers and make other investments, and they pass a portion of that revenue to you in the form of interest. Periodically, (every month or quarter, for example) the bank pays interest on your savings.How much interest can you earn on $1,000? If you're able to put away a bigger chunk of money, you'll earn more interest. Save $1,000 for a year at 0.01% APY, and you'll end up with $1,000.10. If you put the same $1,000 in a high-yield savings account, you could earn about $5 after a year.
