High Yield Savings Calculator

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How much can your money grow in a high-yield savings account? Use this free savings calculator to see how much you'll earn over time.

High-Yield Savings Account Calculator

How comfortable are you with using an online calculator to estimate your savings growth?

How to Use High-Yield Savings Calculator

You can use this savings calculator to see how much you can earn with different APY and initial deposits. All you need to do is input the following:

  • Initial Balance: starting amount you deposited in the savings account.

  • Monthly Contribution: amount you plan to deposit into your account every month.

  • Years to Grow: how long you plan to grow your savings.

  • APY: the annual percentage you expect to earn from your account.

Once entered, click Calculate to view the total interest earned and ending balance.

Do high-yield savings accounts pay monthly?
For most high-yield savings accounts, interest is typically compounded daily and credited monthly. However, it varies depending on the bank you choose.

How Much Will $1000 Make in a High-Yield Savings Account?

If you maintain $1,000 in your high-yield savings account with a 4.50% APY, you can earn around $45 in 12 months. But, this can still increase if you regularly deposit to the account.

Ultimately, how much you can make depends on factors like the starting amount, interest rate, additional contributions, and how long you save.

How much interest does a high-yield savings account usually earn?
High-yield savings accounts typically offer rates that are 8x to 10x higher than the national average rate.[1] However, your interest earnings depend on various factors such as the APY and how much you put in the account.

How often do you check the interest rates on your savings accounts?

What is a High-Yield Savings Account?

A high-yield savings account is just like a regular savings account except it pays higher interest. However, the rates are variable so they can change over time.

Some may have minimum balance requirements or monthly fees, but many do not. You can also easily make withdrawals and deposits, though in-person options vary.

You can typically find the best deals from online banks and credit unions. This is because they have fewer (or no) branches, which helps them save money and offer better rates.

Who has the best high-yield savings accounts?
Here are some of the highest APY high-yield savings accounts for May 2024:

What is your primary goal for using a high-yield savings account?

How to Choose a High-Yield Savings Account

Here are some factors to consider to find the best high-yield savings account for you:

  • APY
    Compare the interest rates of different banks and credit unions. But, be careful because the highest rates may have restrictions that aren't worth it in the long run.

  • Monthly Fees
    A smart thing to do is to choose a bank without monthly fees. You can also pick one where you can avoid them by meeting criteria or maintaining a specific balance.

  • Balance Requirements
    Check if you need to maintain a certain balance to earn the highest APY. It would be best to go for a high-yield savings account with a good rate that applies to all balances.

  • Digital Banking
    Since most high-yield savings accounts are offered by online banks, choose one with a user-friendly online banking platform. Check the app or platform ratings and see what features they offer to help you decide.

Is high-yield savings account interest simple or compound?
The interest earned in a high-yield savings account is usually compounded. Compound interest refers to the interest you earn on an investment, on top of the interest you've already earned. It makes your money grow faster over time.

Can You Lose Money in a High-Yield Savings Account?

Generally, you cannot lose money in a high-yield savings account. As long as your chosen bank or credit union is insured by the FDIC or the NCUA, deposits are protected up to $250,000 per depositor, per ownership category.[2][3]

However, note that monthly maintenance fees and other charges can affect your earnings and potentially reduce your balance.

Do you pay taxes on high-yield savings?
Yes, the interest you earn in a high-yield savings account is subject to tax. It is considered as taxable income by the IRS so you have to fill out a tax form and report payments of interest if your totals exceed $10.[4]

High-Yield Savings Account Alternatives

If you're looking for other ways to boost your savings, consider the following alternatives:

  • Certificate of Deposit
    CDs are ideal for those who prefer earning a fixed rate. However, in exchange, your money will be locked up for a specific period. If you access or withdraw your funds prematurely, you'll have to pay early withdrawal penalties.

    What are the best CDs?

  • High-Yield Checking Account
    A high-yield checking account is perfect for those who want to earn interest on their spending balance. It offers a decent APY and convenient access to your funds through a debit card. However, this kind of account is not very common.

    What are the best high-yield checking accounts?

  • Bonds
    Bonds are a good option for those who want slightly riskier investments for higher returns. You lend money to companies or government entities and, in return, they pay interest regularly. Earnings depend on the bond's market price and interest rate.

Where to put your money to get the best return?
Each investment has its fair share of pros and cons. The best option depends on your financial goals, your risk tolerance, and how long you plan to invest. But, bonds, CDs, high-yield savings, and dividend stocks are some options with good returns.

Bottom Line

A high-yield savings account is a safe and flexible investment, perfect for those who prefer low-risk options. It is an effortless way to earn extra money, especially with consistent contributions.

You can even use tools, like a savings calculator or a budget calculator, to help you on your financial management journey.

References

  1. ^ FDIC. National Rates and Rate Caps, Retrieved 02/20/2024
  2. ^ FDIC. Your Insured Deposits, Retrieved 03/01/2024
  3. ^ NCUA. How Your Accounts are Federally Insured, Retrieved 03/01/2024
  4. ^ IRS. Topic No. 403 Interest Received, Retrieved 03/01/2024

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How Much Should I Save?

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