Interest Rate: Choose High or Choose Low?

Is it true that you always have to choose the one with the lowest interest rate? Well, yes and no. Yes, go for the lowest interest rate possible when choosing which mortgage loan to apply for or which credit card to get. But do no not choose a low interest rate when selecting a savings account.

Savings account: go for high

Interest rate, in the context of a savings account, is better if it is high. The interest rate in a savings account, after all, corresponds to the percentage of money that will be added to your savings every month. A high interest rate, therefore,  helps you earn more money from your savings account.

Credit account: go for low

The interest rate that is calculated in a credit account is different from that of a savings account. In fact, they are totally different. The interest rate in a savings account will help you earn more money, but the interest rate in a credit account will make you spend more cash. After all, the interest rate in your credit account indicates the percentage of money that is added to your monthly balance. Therefore, you will save more money if you decide to choose a credit account with a lower interest rate.

Mortgage loan: go for low

Like a credit account, a mortgage account involves the “borrowing” of money from a creditor. The interest rate in this context, therefore, is the amount of money that will be added to your monthly repayment for the duration of the loan. So if you want to save more money on loan repayments, then choose a mortgage loan with a low interest rate.