13d ago in General discussion
One bank/investment account, or many? What's better for compound interest?
Should you invest in ONE account, or multiple accounts?
Does compound interest lose it's benefits if you spread your money out?
The answer?
NO!!
Let's look at an example:
If you had a $1 in one bank account, and that dollar earned 4%, you would earn 4 cents total.
Now if you had a quarter in 4 different bank accounts, and all those accounts earned 4%...
Each quarter would have received a penny's worth of interest.
4 pennies...4 cents.
Same as having one account.
NOW...I'd suggest buttoning up those accounts. Generally speaking, you should try and only have one bank account (ideally a bank that allows you to have sub accounts so you can make separate goals and see the different buckets, i.e. Emergency Fund bucket, new home bucket, etc).
And ANY business you own should have it's OWN bank account.
Do NOT intermingle accounts or the accounting get's very very messy.
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One bank/investment account, or many? What's better for compound interest?
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