The numbers don’t lie—see how much interest you’re earning (or missing out on) with our savings calculator

Our savings calculator makes it easy to find out. Using the three sliders at the bottom of the calculator, select your initial deposit, how much you plan to contribute each month going forward, and the number of years you plan to save at this pace.

As you make your selections, the calculator will automatically update to display your total estimated interest earnings based on a rate of 4.50% APY compared to what you would earn if you stuck with the national average savings account rate (just 0.42%).  

Compare savings account rates

A rate of 4.50% APY might seem high—and it is when compared to the typical savings account rate. The good news is that many banks offer competitive rates—some well into the 5% range. You just need to know where to find them. Fortunately, we did that work for you: 

What you need to know about high-yield savings accounts 

To make the most of your high-yield savings account, it’s important to understand how they compare to regular savings accounts. Differences in interest rates and where to find the best rates are two of the key differences.

How high-yield savings accounts work

A high-yield savings account is a type of savings account that typically offers a higher interest rate compared to a traditional savings account. You can find these accounts at banks and credit unions. However, you’ll often find the best rates at online banks, which have lower overhead costs than traditional brick-and-mortar banks and pass those savings on to customers through higher yields and lower fees.

Interest on a high-yield savings account is compounded, meaning it’s periodically calculated and added to your balance. Essentially, your interest earns interest. Interest can compound annually, quarterly, monthly, or even daily—the more often interest compounds, the faster your balance grows.

For example, say you deposited $10,000 in a high-yield savings account with a 3% APY that compounds annually. At the end of a year, you’d have $10,300.00 in your account. But if the interest compounded daily, you’d have $10,304.53.

Today, the national average savings account interest rate is 0.42%, according to the Federal Deposit Insurance Corporation (FDIC). However, some of the best high-yield savings accounts offer 5% annual interest rates or higher.

What to look for in a high-yield savings account

Before opening a high-yield savings account, shopping around and comparing accounts from several financial institutions is essential. Some of the major features you might evaluate include:

• Annual percentage yield (APY): The main appeal of a high-yield savings account is the higher interest rate or annual percentage yield. The higher the APY, the more your money will grow over time.
• Fees: Earning a high interest rate doesn’t matter if you lose money to monthly fees. Before opening an account, find out what types of fees the bank charges, such as ATM fees, transfer fees, and penalties for going below a minimum balance. You should choose an account with low or no fees to maximize your earnings.
• Minimum balance requirements: Some banks require a minimum account balance to earn the highest yield, avoid fees, or keep the account open. You might be better off with a different account if you can’t maintain this balance. Prioritize high-yield savings accounts with low or no minimum balance requirements.
• Accessibility: It’s important to have easy access to your money. Look for options like online and mobile access, ATM access, and the speed of bank-to-bank transfers. 
• Customer service: Good customer service can be crucial if you need a helping hand. Before opening an account, read reviews from sites like the Better Business Bureau and Trustpilot to learn about other customers’ experiences. Also, check whether the bank offers multiple methods to reach support, including phone, chat, email, etc.
• FDIC or NCUA insurance: Make sure any bank or credit union you choose is insured by the FDIC or the National Credit Union Administration (NCUA). If the bank or credit union fails, this insurance means your deposits are protected up to $250,000 per depositor, ownership category, and institution.

How to make the best out of your savings 

Getting a great rate is just the first step. If you want to pump up your savings even more, consider these tips:

• Automate: Many banks let you set up automatic monthly transfers from your checking account to your savings account. These transfers help ensure you regularly contribute to your savings— and without having to lift a finger.
• Link a checking account: If your bank offers overdraft protection, you can link your savings account with your checking account and use the balance as a buffer to cover transactions that would put you in the red. Remember that some financial institutions may still charge a fee for overdraft protection, but it’s often much less than an overdraft or insufficient funds fee. 
• Open more than one account: If you’re saving for multiple goals simultaneously, you may want to open a separate savings account for each. Some savings accounts even allow you to create “sub-accounts” to organize your savings into buckets. Whether it’s a vacation, emergency fund, or college tuition, separating your savings can help you better track your progress.
• Use a budgeting app: To maximize the interest you’re earning in a high-yield savings account, be sure you’re socking away as much as possible. A budgeting app can help you find room in your budget and increase your monthly savings.

Frequently asked questions

How often is interest paid on a savings account?

While the compounding frequency will vary by bank, savings account interest is often compounded daily and credited to your account monthly.

What is the difference between compound and simple interest?

Simple interest is calculated only on the original principal amount that you deposited. Compound interest, on the other hand, is calculated on the initial principal and the accumulated interest from previous periods. 

How do banks calculate interest on savings accounts?

Banks use either the simple interest or compound interest formula to calculate interest on a savings account.

Simple interest formula: principal x interest rate x time period

Compound interest formula: A = P(1 + r/n)^nt

• A: accrued amount (principal + interest)
• P: principal
• r: rate
• n: number of compounding periods per unit of time
• t: time in decimal years (for example, 6 months would be 0.5 years)

How much interest would $10,000 earn in a savings account in a year?

The interest that $10,000 would earn over a year depends on the annual percentage yield and frequency of compounding. For example, a 4% APY that’s compounded daily would result in $408.08 in annual interest earnings. You can browse the best high-yield savings account rates to explore your earning potential.

How often do banks deposit interest rates in savings accounts?

Even though the compounding rate varies by bank and account, interest earned in a savings account is typically credited to your account monthly.