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Retirement accounts?
I just learned about compound interest, and wanted to start a retirement account that would have an interest rate of at least 4%. Can I do this through a bank? If not, how would I do this? Thanks!
2 Answers
- shipwreckLv 75 years ago
No, not exactly. Banks don't pay that much. You can open a brokerage account and invest in mutual funds or ETFs and you might average more than 4% return on investments but it isn't interest it is growth and dividends.
You may not open a retirement account unless you have earned income. You can open a taxable investment account and you don't pay tax on the profits until they distribute them or you cash out investment.
Go to a company like Vanguard or Fidelity or Charles Schwab to open an account.
Compounding is the greatest force known to man. May the force be with you. Debt compounds too so stay out of consumer debt.
- efflandtLv 75 years ago
There was a time when you could make 5% in a money market account, but those times have passed for now. Last I knew savings accounts and money market funds in the US were paying 0.01% APR. The interbank interest rate in Japan is actually negative.
I have some stocks that pay 3 to 5% dividends and some that may pay more than that, but the price of the stock can fluctuate.
