High Interest Investment

savings accounts?

I wanna start saving money to buy a car and would like to know if it would be a good idea to start putting money into my savings account so the money could gain interest, so i can get my car faster... whats the minimum amount of money one can put into their savings accounts before it gains interest? and will this be a good idea?

Public Comments

1. Most savings accounts will allow you to open one with a minimum of 100 dollars or sometimes even less. That wont make much interest, but the more money you put it there, the more it will earn.
2. Look into credit unions in your area, and shop around to see who offers the highest interest rates on a savings account. Rates will range from 0%-4%, and will be determined by the amount you can deposit, the institution, and the vehicle (type of account). The interest won't be much but every penny helps. I have a savings account with a bank and credit union. The credit union has been averaging 3.8%, while my bank has been offering 1% or 1.5%. Banks tend to be more convienant having atms everywhere.
3. A savings account is a good idea, assuming you're planning to purchase the car soon. Most banks and credit unions will pay minimal interest on any balance, but will likely pay more as the balance increases. If it's going to take a while to save for the car, consider putting some of the money into a CD (Certificate of Deposit). Usually, you can start these with $1000. Once you save the first $1000, buy the CD, then continue saving until you get another $1000. Right now, I would stick with shorter-term CDs (3,6, or 9 months) since there is a chance that the Federal Reserve will begin raising rates to try to control inflation.
4. Obviously, the more money you put in, the more interest it will earn. HOWEVER, I've never seen a bank that offers any more than 1% interest on savings accounts, it's typically 0.25 or around there. There are some online banks that offer more interest than your local bank would. Depending on when you'll need the money, you could look into a money market account where you'll get more interest. Because if you put $500 into a savings account that yields 1% interest, you'd only be earning $5. Great idea to save your money, but if you're thinking you'll get the car faster due to interest, it takes quite some time to build that up unless you're dropping a lot of money at one time.
5. Saving money is a good idea. Go to www.bankrate.com to find the saving account or money market account with the best rates. Do not expect the interest rate to get to your goal that much faster. Staying disciplined will. Increasing your contribution will.
6. There is no minimum amount to start earning interest in a savings acct. But a minimum requirement to WAIVE the monthly services fee...so pay attention to bank's minimum requirements. You just need to do a little research with bank's savings acct. is the best for you, every banks varies in both monthly fees and interest rate.