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- Before I met my now-fiancé, I didn’t know I was missing out on earning interest on my savings. I kept my money in a typical bank savings account that was earning less than .02% interest.
- I moved my money to a high-yield savings account about five years ago and decided to put aside all the cash I was earning in interest.
- Five years later, my fiancé and I have earned $15,000 in interest combined — enough to cover more than half of our $27,000 wedding budget.
- Find out who has the best high-yield savings account rate right now »
One of the biggest financial mistakes I made, for close to 10 years of my life, was keeping my savings in an account that generated less than .02% interest every year.
As I was learning to stick to a tight budget and put more of my cash away, I was losing out on valuable interest that could have translated into thousands of dollars every year — money that I could have used for so many important things (from paying my taxes to contributing to my rent). But instead, I was earning a couple hundred dollars that I used for a month of groceries or a winter coat.
Switching to a high-yield savings account
It wasn’t until I decided to unveil my finances to my now-financé, then-boyfriend of a year, that I realized I was even making this mistake. I was loyal to my low-interest bank because it was the first place I’d ever opened up accounts in my name; I felt comfortable banking there and didn’t even realize that other banks, especially online banks, were offering high-yield savings accounts that would make a significant difference in the amount of money I could accumulate every year by keeping my money there.
When my fiancé saw how little I was earning, he begged me to switch. After doing extensive research, I moved all of my cash to a new bank that, at its high, offered 2% interest. The new bank also compounded interest daily, as opposed to my old bank that compounded monthly, meaning I’d make a bit more this way. That was five years ago.
Saving my earned interest to pay for my wedding
I decided that I’d take that earned interest every year and put it aside to use for something big. After getting engaged, my fiancé and I decided to use the interest we were earning on our savings to pay for part of our wedding.
Over the years, we’ve earned about $15,000 in interest by keeping our money in high-yield savings accounts; that covers more than half our wedding expenses (our budget is around $27,000). We’ve used that cash for deposits and the next scheduled payment with our biggest vendors: the venue, caterer, DJ, and florist.
It was important to me that if we planned a wedding, we wouldn’t go into debt for it. We are paying for this wedding ourselves and I didn’t want to open up new credit cards or max out my current ones to pay for vendors. We set a budget around what we could afford, tapping into that saved interest we’ve accumulated over the years, paying vendors post-wedding with cash gifts from guests, and budgeting a part of our paychecks every month to pay for the rest.
If I hadn’t moved my money into a high-yield savings account close to five years ago, I wouldn’t be able to even afford to pay for the wedding DJ, let alone more than half the wedding.
It can be easy to stay put and keep your money in an account or with a bank you’ve been loyal to. But the truth is, you’re making a big money mistake and missing out on interest that you can use for something big and meaningful in your life.