It depends on your account. With most savings accounts and money market accounts, you'll earn interest every day, but interest is typically paid to the account monthly.4 However, CDs usually pay you at the end of the specific term, but there may be options to receive interest payments every month or twice a year.6 If you aren’t sure how interest works for your savings accounts, it may be time to call your bank.
Interest goes the other way when it comes to borrowing. Banks and other financial institutions typically charge interest any time they loan money. Meaning, you pay back what you borrowed and then some.
Generally, savings account rates are lower than the interest rates banks charge when they loan money.
Whether you’re saving or borrowing, interest is a big part of banking. And while you may not be saving up for your favorite action figure or candy bar (or whatever you bought with that lawn mowing money), it’s still exciting to see your money grow.
There is a wide range of banking products that can help you earn interest: a few select checking accounts, savings accounts, money market accounts and CDs.
You’re likely to find higher interest rates with accounts that have additional restrictions. For example, you will earn more by locking up your funds in a 3-year CD than you will by depositing them in a checking account that allows unlimited withdrawals.