STCU employee, Kelli, helps people become STCU members and open savings accounts every day.
The concept of interest can be difficult to understand for someone new to saving money in a savings account.
Interest can be defined as payment from your financial institution for allowing the institution to use the money that is placed in your savings account.
A financial institution is willing to pay some money (interest) to the person saving money so that they can loan those dollars to others who need to borrow money for purchases like a car or home.
However, borrowing money is not free. Interest can also be defined as the cost of borrowing money from a bank or credit union.
Interest can be something you earn (for saving money) or pay (for borrowing money).
Which type of interest do you like better and why?