Ever wonder why it’s so important to save your money? Someday when you are on your own, you need to be ready to handle your money. By saving a little bit at a time, you are making sure your future is bright! When you set money aside in a savings account at your credit union, it starts to make its own money called interest or dividends. The more you save, the more money you make! As your money grows, the interest or dividends you earn will start to make their own interest or dividends which is called compound interest. It is free money that you earn by just taking your money out of your piggy bank and placing it in a Velocity Community savings account.     

How To Calculate Compound Interest?

Based on the original amount of money that you deposit into your savings account, you can start figuring out how much compound interest you can earn. Let us take our Youth Month CD Special and calculate what you can earn in the year by putting $1,000 away. On the $1,000, you are earning 6% APY.¹

Total amount = Principal (1+rate/number of times that interest is compounded) ^{Time money is invested}

$1,060 = $1,000 (1+6%/12)¹

By the end of the year, you will have earned $60 on top of your $1,000 by having your money work for you.  

Get A Better Understanding With This Game

An easy way to learn about compound interest right at home is to make a game of it. First, take one of your favorite treats like M&Ms or Skittles and set a handful aside. Make a deal with your parents that if you don’t touch your candy for an hour, they will add another 5 pieces of candy to your pile. The longer you wait to have your tasty treat the more you get in the long run. This is how it works when you put your money away and don’t touch it.

Source: Money Geek

1) APY=Annual Percentage Yield. Only members 17 and under are eligible for this special certificate. One CD per Youth Member. Youth Certificate Special requires a minimum deposit of $250, maximum amount of $1000. New CD money only. Only available week of April 17 – 21, 2023.