Eli5 What does it mean to have a savings account with interest rate?

Question

I have just started using a debit card but i want an option for a savings account . Most saving accounts come with 0.5-1% interest rate so what exactly does that mean?
Also would like to know if this is religiously acceptable (islam) (only if anyone has that knowledge please, its alright if you dont, you can avoid mentioning it)

In: 0

Answer 1

Look at it this way – if inflation is at 4% and your bank offers 1% interest, your money will actually devalue by 3% a year. I doubt Allah would object to that.