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Recent stock market fluctuations may have you scurrying to find a safe place for your money. Forget the mattress - the answer may be right under your nose: in your savings account. The beauty of the traditional interest-bearing savings account is that your money remains safe and secure from market dips, up to $100, 000 per depositor of FDIC deposit insurance coverage, while continuing to grow. The key to this growth is the compounding of interest. As Albert Einstein opined, the most powerful force in the universe is the compounding of interest. It's the way your money builds upon itself and a way you can build your savings safely. debt consolidation and credit

Simply put, compounding is a process where the value of an investment increases exponentially over time. Compound interest is calculated not only on the principal in your savings account, but also on the interest that accumulates in the account. By leaving your money - both the principal and the interest earned each year - in the account, you allow your savings to build upon itself, thus creating additional savings for you. check credit rating

The key to taking advantage of the power of compounding interest is to let the interest stay in the account. Consider that you opened a savings account with a principal amount of $100 and that the account earns 6% interest compounded annually. Without making any additional deposits to the account, you would earn $6 a year on that account. The next year you would earn 6% on the total principal of $106, and so on. In 30 years, that $100 savings account would be worth approximately $605. If you were to combine the gains you received from compounding with a program of regular additional deposits to the account, the long-term results could be quite substantial. By adding just $100 per year to the account, it would grow to $8, 670 after 30 years. This is quite a return on a $3, 000 investment. Of course, these examples assume that the interest rate on the account would remain at 6%, and does not consider the impact of income taxes, so those factors need to be considered in your analysis. improve credit rating

So how long would it take to double your money using this strategy Simply follow the Rule of 72. This rule of thumb estimates the amount of time it takes an investment to double when the interest is left in the account to compound. Simply divide 72 by the rate of interest you are earning to calculate how long it will take to double your money. For example, with a 6% rate of return, it will take 12 years for your money to double (72 divided by 6 equals 12). Using the example above, it would take only 12 years for the initial principal of $100 to double to $200 if you allow the interest to stay in the account and compound. Of course, your money will double more quickly with a higher interest rate. Again, remember that your interest rate may change, and income taxes have also not been factored into these examples. credit online rating report

Is compounding interest a sure-fire way to double your money overnight No. But it is a proven process to build your money and increase savings without spending any additional money out of pocket. By allowing the power of compounding interest to help your money build upon itself, you are taking advantage of a powerful tool that will help you accumulate and enjoy savings in the years to come. credit score rating scale

WTDirect is the smarter choice for discerning clients looking for flexibility in managing larger deposits. We're a new online way of doing business from Wilmington Trust, an organization with integrity, strength, and a commitment to client service. The Wilmington Trust family of companies is a recognized leader in the financial services industry and represents more than a century of banking and wealth management expertise. WTDirect is designed to continue this tradition of service - online - so we are a choice you can make with confidence. bad card credit credit people