How does the amount of money in your savings account grow over time?

Question

(1 point)
Banks who are insured through FDIC add money to your savings account each month.
Money from your checking account is automatically moved into your savings
• account every month.
• Money in your savings account earns a certain amount of principal each year.
• You can earn interest on the money you keep in your savings

Answer 1

The correct statement regarding how the amount of money in your savings account grows over time is:

• You can earn interest on the money you keep in your savings.

When you deposit money into a savings account, the bank pays you interest on that money. This interest is typically compounded over time, which means you earn interest not only on your initial principal but also on the interest that has already been added to your account. This is how your savings can grow.