How do you make money on interest accounts

They had a thing about it on the news. They said if you have a small amount of money such as five hundred dollars you can put it in an interest account and you can make money over the next couple of years. Is this true? Do they work? Is there a flaw of some kind?

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Interest bearing accounts pay a percentage of the amount on deposit. If you put $500 in an interest bearing account that pays 3% APR, it will earn $15 in a year. The $15 is taxable; i.e., you will owe taxes on it because it is income. The tax percentage is based on your level of annual income. You do not (as stated by someone else) pay taxes on the total money on deposit, though you are required to pay income taxes on the money when originally earned. The interest you receive is additional, taxable income.As to the question of "do they work" it depends on what's meant. Yes, they return interest as agreed (assuming a legitimate investment account), but an interest bearing account is unlikely to keep up with what's offset by taxes + inflation.For example, if you put $1000 in an interest bearing account that pays 3%, you will have $1,030 a year later. You owe taxes on the $30 of, let's say, 20% (depends on total income), so that's $6.00 and it leaves you with $1,024. You are twenty-four bucks ahead -- but hold the phone.