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Miracle of Compound Interest No Longer Miraculous

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Albert Einstein is rumored to have called compound interest the greatest invention in human history, but that was in the days before interest rates on savings accounts fell below one percent, as they have now. According to Market Rates Insight, the national average interest rate for savings, checking and other deposit accounts is now at 0.99 percent, the lowest rate in more than 10 years.

Wait, it gets worse. According to Bloomberg, an increasing number of savers are seeing those deposit earnings eaten up by fees and account charges. "That’s frustrating people like Ken Ward, who recently passed on a savings account with a 0.01 percent interest rate at the Chase bank branch near his home in Wantagh, New York. “We went to Chase because of the convenience,” said Ward, 57, a stock-loan trader who was helping his daughter find a place to tuck away $10,000. “But with those rates, we might as well put it in the mattress and then at least we won’t be charged any fees.”

Now Ken, don't be too hasty. Let's go back to the miracle of compound interest.

Did you know that a mere $10,000 saved at Chase's .01 percent interest rate and compounded daily would after 20 years be worth $10020.02? That's almost enough to buy something. By comparison, if you invested that same amount of money in the stock market then after 20 years you'd have the right to join other shareholders in a class action lawsuit to try and recoup your as much as 15 cents on the dollar of your initial investment.

Also, the savings account is federally insured!

Oh, and check out the Compound Interest Calculator page from WebMath:

Wait, wait, never mind. Turns out the secret to getting rich IS winning the lottery.
POSITION:  No positions in stocks mentioned.