High-Yield Savings Calculator
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APY already includes compounding, so a year’s interest is simply balance × APY. $10,000 at 4.00% APY with $200 a month grows to about $15,800 in 2 years, earning about $1,000 of interest, which is about $900 more than an account paying 0.40%.
| After 2 years | |
| You deposit | $14,800 |
| High-yield balance | $15,801 |
| High-yield interest | $1,001 |
| Regular balance | $14,899 |
| Regular interest | $99 |
| Extra interest from high yield | $903 |
| Year by year (high yield) | |
| Month 12 | $12,844 |
| Month 24 | $15,801 |
Show steps
- Monthly rate from APY = (1 + APY)^(1⁄12) − 1 = 0.3274%.
- Each month: balance × (1 + monthly rate) + deposit.
- Interest = final balance − deposits = $15,801 − $14,800 = $1,001.
How to use the calculator
- Enter your starting deposit and what you will add each month.
- Enter the high-yield APY you are considering and the APY of your current account.
- Choose the number of years, and your tax rate if you want an after-tax figure. Press Calculate.
APY vs APR
APY (annual percentage yield) includes the effect of compounding, so $1,000 at 4% APY earns exactly $40 in a year with no deposits or withdrawals, however often interest is added. APR is the simple yearly rate before compounding. To compare savings accounts, always compare APY.
What a few points of APY are worth
| Balance for one year | 0.40% APY | 4.00% APY | Difference |
|---|---|---|---|
| $5,000 | $20 | $200 | $180 |
| $10,000 | $40 | $400 | $360 |
| $25,000 | $100 | $1,000 | $900 |
| $50,000 | $200 | $2,000 | $1,800 |
High-yield accounts are a good home for an emergency fund: the money stays safe and available while earning more. For goals many years away, investments may grow faster but can also fall.
Savings interest practice questions
Test yourself with 6 multiple-choice questions. Choose an answer and press Submit to see if you are right and why. Your score appears at the end.
Quiz complete
Frequently asked questions
How is interest calculated on a high-yield savings account?
Interest is usually compounded daily and paid monthly. The APY tells you the yearly result: balance × APY is a year's interest on a steady balance.
Is a high-yield savings account safe?
At an FDIC-insured bank or NCUA-insured credit union, deposits are protected up to $250,000 per depositor, per institution, per ownership category.
Do high-yield savings rates change?
Yes. The rates are variable and usually move with the Federal Reserve's interest rate decisions.
Is it worth switching banks for a higher APY?
On larger balances the difference can be hundreds of dollars a year. Check for fees, minimum balances and how quickly transfers arrive before you move.
Sources
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