Savings Account Interest Calculator
See how a high-yield savings account grows from an initial deposit and regular contributions. Includes APY compounding and a year-by-year balance chart.
HYSAs currently pay 4–5%.
How it works
- 1Enter your starting balance
What you have in the account today (or $0 to model a fresh start).
- 2Add monthly contributions
Most people get the best results from automating a fixed monthly transfer.
- 3Pick the APY and timeline
High-yield online banks currently pay 4–5% APY.
A savings account is the single best home for short-term cash. It's safe, FDIC-insured up to $250,000 per bank, and high-yield online accounts now pay 10–50× more than traditional brick-and-mortar banks. The difference compounds dramatically over time.
The math. APY (Annual Percentage Yield) is the effective rate after compounding. Most online savings accounts compound daily, so a stated 5% APR becomes about 5.13% APY. The calculator above uses APY directly, so you don't need to convert.
Typical savings goals: emergency fund (3–6 months of expenses), down payment fund (1–5 years out), short-term goals like a wedding or vacation, and 'cash buffer' for irregular bills. For anything 5+ years away, broader investments usually win — even after factoring in volatility.
Watch out for taxes. Savings interest is taxed as ordinary income at your federal and state rate. A 5% APY is roughly 3.6% after federal taxes for someone in the 28% bracket. Account for this when comparing to municipal bonds or other tax-advantaged options.
Where to find good rates: online-only banks (Ally, Marcus, Discover, Capital One 360, Wealthfront Cash), credit unions, and brokerage cash management accounts. Avoid 'teaser' rates that drop after 6 months — look for consistently competitive APYs.
Example scenarios
Grows to ~$8,000. About $750 in interest, $6,000 in contributions, plus the starting amount.
Grows to ~$54,500. Strong way to fund a future down payment.
Grows to ~$25,000. Aggressive emergency fund / wedding savings.
Common questions
What's the difference between APR and APY?
APR (Annual Percentage Rate) is the simple interest rate. APY (Annual Percentage Yield) is the effective rate after compounding. A 5% APR compounded daily is closer to 5.13% APY. Banks usually advertise APY for savings accounts and APR for loans.
What's a good savings interest rate?
As of 2026, high-yield savings accounts (HYSAs) pay around 4–5% APY. Traditional big-bank savings accounts often pay 0.01–0.5%. The difference is enormous — $10,000 earns $400/year at 4% versus $1/year at 0.01%.
How does compounding frequency affect savings?
More frequent compounding means slightly higher returns. Daily compounding at 5% beats monthly compounding at 5% by a small but real amount over many years. Most online banks compound daily.
Should I use a savings account or invest?
Savings accounts are best for emergency funds (3–6 months expenses) and short-term goals (under 5 years). For long-term goals like retirement, broader investments historically outpace savings rates by a wide margin.
Are savings interest taxes a big deal?
Interest is taxed as ordinary income. At a 24% federal bracket, a 5% APY is closer to 3.8% after taxes. For tax-free growth, look at Roth IRAs and 529 plans for relevant goals.