For those who struggle with saving sometimes, the least trivial, least strenuous approach can be the method with the highest success rate.

We’ve heard many stories of unlikely millionaires who ended up with such wealth not because they invested in Microsoft or picked winning lottery numbers, but because they were able to save the money they made.

These were old-fashioned folks who stocked away large amounts of cash in a traditional savings accounts, and even though there was an insignificant interest rate they still ended up with huge savings. They did one thing that made it happen: contributing to a savings account.

Sounds obvious, but many people still can’t get into the swing of saving. These millionaires’ success is a worth lesson for people who have trouble saving.

Hindrances of Bank Account Options

Visit any bank website and you’ll find a list of options under the “Savings” tab. Savings accounts, money market accounts, and certificates of deposit are standard choices available to customers. The up-and-coming saver is often confused by the number of account selections.

Some of us pick unsuitable accounts and some of us just give up. As we discover more profitable ways to grow our money, we tend to introduce complexity to a rather elementary financial goal.

For example, in May, Series I Treasury savings bonds will yield at least 2.30% APY over the next 12 months. They’re not bank accounts but they’re just another savings instrument in which many people will invest.

Working Against Your Goals

Interest yields are eye-candy to savers chasing the fast lane but competitive rates change on a daily basis. These “rate-chasers” often find themselves dealing with many accounts – a nightmare to manage and track.

The applications, funding deposits, and accounts closures involved with new accounts adds chaos to personal finance. You may be performing work that does not result in a major difference in your savings.

On another note, a popular trend introduced by online banking is automation – monthly transfers into savings that require a one-time setup. Personal finance experts recommend financial automation because takes a chore out of mind.

In a sense, it is a lazy approach – that works wonders.

Essential: Add to Savings

Ignore the interest rates. Ignore the extravagance of cool bank accounts.

The action of adding to savings will trump the attempts to maximize interest yields.

Someone who has $1,000 and adds $25 per month would realize a 30% increase in the account balance after one year. Someone who has $10,000 and adds $50 per month would realize a 6% increase in the account balance after one year.

The current interest rate environment supports the idea that adding to savings is more impacting than the futile decision between a 1.00% APY savings account and a 2.00% APY 3-year CD. If and when interest rates rise, there may be a greater incentive to chase higher yields but the core habit of making savings contributions will always be superior to the ability to earn more interest.

A single high-yield savings account is the ideal choice – and only choice – to completing amassing sizable savings.

Follow Simon on the Community and Twitter: @simonzhen.

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  • KC

    I agree that the saving habit is the most important aspect of accumulating wealth. My wife and I retired early (age 56) by investing in savings vehicles exclusively (T-bills, Savings Bonds, CD’s, and annuities)–No Stocks. It can be done. The great thing about our approach is when the stock market crashed in 2008 and caused many would-be investor retirees to abandon their retirement plans, we retired on time in the Spring of 2009. Our money continued to grow throughout the stock market collapse both from interest earned and our continued contributions.

    • Simon Zhen

      Congratulations on an amazing feat. Being retired at 56 on solely low-risk savings instruments is worthy of envy.

      Many other people though won’t be able to build a comfortable nest egg without dipping their hands into more risky investments. But, you are a great example of how dedication to saving is the core approach in retirement planning.