Did you know that people who maintain a savings account and regularly deposit money into it have a far better chance of becoming wealthy by the time they retire than people who don’t hold a savings account? While it’s true that simply depositing a few dollars each week into a savings account won’t turn you into Bill Gates overnight, the fact is that people who can effectively manage their money, even in smaller amounts like opening a savings account and adding a few dollars on a regular schedule, stand a much greater chance of retiring wealthy than people who don’t have a savings account. The theory is that people who can be thrifty and save money when they have very little of it can be just as thrifty when they eventually get a higher paying job, reduce their expenses, or come into money in some other way.

Also, many financial institutions are offering a product termed a high yield savings account. This type of savings account will usually require someone to set up a regular schedule, via direct deposit, of a certain amount of money over a specified period of time. In return, the institution will offer an extremely reasonable interest on the amount that you deposit. Currently rates are approaching 5%, with some institutions offering rates over 5%. Also, if you maintain a higher balance on your account you can receive an even higher interest rate. High yield savings accounts are a great option to consider at anytime, but people who should be especially interested in this are younger people without enough money to really get into serious investing. Even tiny amounts of money invested regularly over a long period of time can add up to an enormous amount due to compound interest.

The key to generating a nice sum of money in your savings account is very simple – don’t spend it. Many people think that just because they open up a savings account with a decent interest rate that they can just go ahead and take a little out every month to spend. When they see their balance is grown by a few hundred dollars they go ahead and take out $50 to buy a new toy. Doing this is a surefire way to shoot yourself in the foot, and nobody will ever become wealthy by spending their money instead of making it work for them. High yield savings accounts can be a great tool to invest money and earn a good interest rate, and when combined with a high yield checking account will provide for easy access to the money if it is needed.

Try to leave the money in there unless an emergency comes up and you absolutely have to have it. Start by opening up a regular savings account at your bank, and then making regular deposits into it. Most banks will let you set up a payment schedule where they just deposit a certain amount from your checking account into your savings account on a certain day every month. Don’t think about that money, pretend it doesn’t even exist, and after a few months of running your system like that your budget won’t even miss that money anymore. Check your balance at the end of the first year, and remember that the way compound interest works, the longer you keep that money in there without reducing the balance in the account, the more you will make off of it.