Where can APY take me in life?

If you’re worried about rising interest rates, we’ve got good news for you: Higher interest rates can actually propel you toward your goals. You just have to know how to take advantage of them.

While the higher rates make borrowing money more expensive, the flip side is that they can also help your money grow faster. If you focus your efforts on building up funds in a high-yield savings account with compound interest, you can make interest rate hikes work in your favor. The key is to seek out an account with the highest possible annual percentage yield (APY).

If you’re not familiar with the term, check out our primer on what APY is and how it’s calculated. In a nutshell, APY refers to the annual interest you can earn on an account that pays compound interest.

Once you understand how APY works, you can use it to take you wherever you want to go in life. Here’s how:

Grow your savings

The first step in any long-term financial strategy is to start growing your savings. While it’s important to set aside a portion of your income each month, it’s equally important to store those funds in an account that will maximize their growth. A traditional savings account is a good place to start, but it shouldn’t be your end destination.

So how do you choose the best account for growing your savings? Compare their APYs and pick the highest one. Our Ignite Savings account, for example, pays 5.25% APY⁴ on the first $500 in your account, so it’s a great way to build up your savings quickly. Consider pairing it with our interest-earning Remarkable Checking to get the most possible interest from every penny you deposit.

Build your wealth

Once you’ve built up some savings — in other words, you’ve got a comfortable emergency fund with extra to spare — you’re ready to take it to the next level: investing. We don’t just mean that in the usual sense of the word, we mean it in a broader sense.

Investing can mean different things to different people, and there are many paths to building wealth. For you, it might mean transferring funds into a money market account where you can earn a higher APY on large balances. Or starting an investment portfolio. Or using certificate of deposits to maximize your APY. Or buying a home or other property so you can start building up equity.

The key is to define what wealth means to you and use APY as a tool to get you there.

Take the leap

What are your big dreams? Starting your own business? Trying out a different career? Moving somewhere you’ve always wanted to live?

Big dreams can be scary to pursue because they often require a leap of faith. But when you finally decide to go for it, the rewards are often incalculable.

Whatever your dreams are, APY can help you to take the leap. How? By building up your safety net. The more funds you have stashed away in savings and investments, the more confident you’ll feel about taking the next big step in life. When you know you have a cushion to fall back on, it’s a lot easier to take calculated risks that have the potential to pay dividends in future happiness.

Are you ready to start growing your money? Take advantage of rising interest rates and let APY power your financial future.

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