How does a savings account work?

Question

I'm new with financing payments, so i want to put a savings account.

Answer 1

Savings accounts and finance payments have nothing to do with each other.

A Savings Account is simply a service whereby you give your money to a bank, and they hold it for you and give you a tiny amount of interest.  The interest is growth that your money makes.  The problem is, you get such a small amount.

Lets say that you give them $100.  In a few years you want it back, so they give you your $100, plus perhaps three dollars in interest.

What is bad is that your $103.00 can't buy what $100 could  a few years ago.  You lose.