Friday, 08 03, 2012
Whether saving or borrowing money, you need to pay close attention to your interest rate, according to the Kentucky Higher Education Assistance Authority (KHEAA).
For savings accounts and other investments, look for the highest interest rate possible. But examine closely any opportunities that promise tremendous interest rates. Those may be scams that cause you to lose your money. If it sounds too good to be true, it probably is.
Look for investments that can earn you compound interest. That means you earn interest not only on the amount you invest, called the principal, but also on the interest you have already earned on the principal.
Compare the annual percentage rates (APR) on loans and credit cards. The lower the APR, the less you will pay in interest. A low APR is especially important if you carry a balance on your card.
Look carefully at loans that carry a variable or adjustable interest rate. The interest rate on those loans goes up or down depending on market conditions. You might prefer a fixed interest rate. It may start out higher than a variable rate, but it will not increase as most variable rates do.
KHEAA is the state agency that administers Kentucky’s grant and scholarship programs, including the Kentucky Educational Excellence Scholarship (KEES).
To learn how to plan and prepare for higher education, go to www.gotocollege.ky.gov. For more information about Kentucky scholarships and grants, visit www.kheaa.com; write KHEAA, P.O. Box 798, Frankfort, KY 40602; or call 800-928-8926, ext. 6-7372.