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A Quarter a Day

My favorite money myth is that only those with plenty of disposable income get rich. What a crock. The truth is that it's never been easier to save than it is now. Spare change is all you need.

The almighty quarter
For example, just a quarter a day, saved over 20 years, becomes more than $4,500 if you earn a market-matching 8% annually. And it becomes $21,000 after another 20 years, even if you don't contribute another dime.

When I last wrote about stashing spare change for retirement, I received a fair amount of reader complaints. It wasn't the math that bothered people; it was the unreality of the scenario. "You can't really invest a quarter a day," they wrote. And they're right, to a degree. Index funds typically demand an opening investment in the hundreds, if not thousands of dollars. But you absolutely can earn more than 4% annually investing quarter by quarter, and you'll pay absolutely nothing to do so.

Is orange better than green?
How? Meet a slew of new digital savings accounts that pay well, have no minimums, and allow you to transfer spare change electronically. You can even earn interest on as little as $1. Here's a list of some of the highest yielding savings deals, compiled by the highly useful Bank Deals blog:

Bank

Yield

Notes

Apple Bank for Savings

5.15%

Minimum $3 fee for transferring funds out of account. Bill pay available free for the first three months and then $4.95 per month thereafter.

HSBC Direct

5.05%

Deposits can be made at ATMs, by mail, and electronically.

Amboy Direct

5.05%

Wire transfers, mail-in deposits, and issues of bank checks are not available.

EmigrantDirect

5.00%

May link up to two checking accounts. Offers a 1.40% cash-back MasterCard.

Citibank

5.00%

Requires an accompanying Citi account, preferably checking. Fees may apply to the checking account.

ING Direct

4.35%

Open account with $1 check. Automatic savings plan offered.

*Advertised rates are subject to change and some restrictions may apply. Please consult each bank's website for more details.

My favorite of these is the ING Direct Orange Savings account, though HSBC comes in a very close second. A call to ING's account services department confirmed that it is, indeed, possible to transfer money quarter by quarter if you'd like with no transaction fees. I call that exceedingly Foolish.

Follow the money
According to Salary.com, a secretary earns $29,305 annually on average. Maybe that's you. If so, saving and investing probably isn't top of mind, especially with rent to pay and groceries to buy. Fair enough. Just remember that a quarter is just three-tenths of 1% of the $80.29 you earn daily before taxes. That $0.25 a day could grow to equal your annual salary if invested well over the course of decades. Just think, you can get there four times as quickly if you can set aside $1 a day.

Have other money tips? Tell me. I'm writing about personal finance topics every week as part of our new newsletter service, Motley Fool GreenLight. It's tailor-made for Fools like you who aim to take control of their financial destiny. Want to learn more? Just click here.

Fool contributor Tim Beyers is fond of oranges as well as the Orange Savings Account. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. Check out all of his stock holdings at Tim's Fool profile. The Motley Fool has an ironclad disclosure policy.


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Tim Beyers
TMFMileHigh

Tim Beyers first began writing for the Fool in 2003. Today, he's an analyst for Motley Fool Rule Breakers and Motley Fool Supernova. At Fool.com, he covers disruptive ideas in technology and entertainment, though you'll most often find him writing and talking about the business of comics. Find him online at timbeyers.me or send email to tbeyers@fool.com. For more insights, follow Tim on Google+ and Twitter.

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