Have you ever heard of the Rule of 72?  If not, then you absolutely need to learn it.  This simple Rule of 72 forms to basis for why high interest rate savings is so important.  This article will explore the Rule of 72 and how it affects you high interest rate savings plan.

The rule of 72 is formula that tells you how long it will take for your money to double.  The rule of 72 formula is:

72 divided your average return on investment equals the time it will take for your money to double.

Let’s use the ING accounts for our example here.  Let’s assume you have opened an orange ing savings account earning 3.30% interest.  The rule of 72 tells us that it will take you 21.8 years for your money to double.

Now you might be saying to yourself, why am I going to spend time finding a high interest rate savings account, if it is still going to take 21.8 years for my money to double.  Well, let’s see how long it would take for your money to double in a traditional savings account.  Let’s say you are eanring 0.25% in your traditional savings account.  It would take you 288 years to double your money.  Now that is a long time.

High interest rate savings accounts are not about getting rich quickly.  Instead, they are a means to save money over your lifetime in a very safe place.  You also need to invest in stocks and bonds and other investments that pay higher interest, but your high interest rate savings is a key component to your portfolio.