[disneysteve]

Yes, that's how interest works. An annual yield of 1% will earn you $1.00/$100 on deposit.

By putting your money in a savings or money market account like ING, you are accepting a low rate of return because there is virtually zero risk of losing your principal since the account is FDIC insured up to $100,000. You also get easy access to your money whenever you want it. If you want to shoot for a higher return, you need to be willing to accept more risk and, possibly, less liquidity. You can invest your money in the stock market which, over time, averages 10-12%/year (though it certainly isn't going that way this year so far). The risk, though, is that the value of your investment could go down and a year from now you could have less than you started with.

What you should do depends in part on what the money is for. If it is for a short-term need, like a house downpayment next year or a new car or a tuition payment, you can't take the principal risk that comes with the stock market. If, however, you are investing for the long-term, like retirement 20-30 years from now, you most likely can't reach your goals with a low yield savings account like ING. Your money simply wouldn't grow fast enough. When you factor in inflation, it may not grow at all.