Savings Account Calculator
See how much you could earn with a high-yield savings account compared to a traditional bank.
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How Compound Interest Works
Compound interest is when you earn interest on both your initial deposit AND the interest you've already earned. This creates a snowball effect where your money grows faster over time.
The formula used in this calculator is:
Where:
- A = Final amount
- P = Initial principal (starting balance)
- r = Annual interest rate (APY as decimal)
- n = Number of times interest compounds per year (365 for daily)
- t = Number of years
- PMT = Monthly contribution
Why High-Yield Savings Accounts Matter
The difference between a 0.30% traditional bank APY and a 4.50% high-yield APY might not seem huge—but over time, it adds up to thousands of dollars in free money.
For example, on a $10,000 balance with $200 monthly contributions over 5 years:
- Traditional bank (0.30%): Earn ~$180 in interest
- High-yield bank (4.50%): Earn ~$2,900 in interest
- Difference: $2,720 extra just for choosing a better bank!
Calculator FAQs
Is this calculator accurate?
Yes! This calculator uses the standard compound interest formula with daily compounding, which is how most savings accounts work. However, actual results may vary slightly due to APY changes, fees, or how banks calculate interest.
What's a realistic APY for high-yield savings?
As of January 2026, the best high-yield savings accounts offer between 4.25% and 4.60% APY. Traditional brick-and-mortar banks typically offer 0.01% to 0.50% APY.
How often does interest compound?
Most online banks compound interest daily and pay it monthly. This calculator assumes daily compounding (365 times per year), which is the most common method.
Are there taxes on savings account interest?
Yes, interest earned in savings accounts is taxable as ordinary income. You'll receive a 1099-INT form if you earn more than $10 in interest per year. This calculator shows pre-tax earnings.