High-Yield Savings Calculator: Estimate Your Interest Earnings

How to Use the High-Yield Savings Calculator

Using the calculator takes only a few steps. First, enter the amount of money you plan to place in savings. Then choose how long you want to leave the money in the account. The calculator estimates your ending balance and compares the potential interest earned at a high-yield savings APY with the national average savings rate.

1. Enter your initial deposit. This is the amount of money you would start with in the savings account.
2. Select a time period. Compare how your balance could change over one, three or five years.
3. Review the projected balance. The result estimates the value of your starting deposit plus interest.
4. Compare the two APYs. Review the projected earnings from the high-yield rate alongside the national average.
5. Test different starting balances. Changing the deposit amount can show how the dollar difference between rates grows as your balance increases.

Because savings rates can change at any time, the result should be treated as an illustration rather than a guaranteed future account balance.

How Does a Savings Calculator Work?

A savings calculator estimates how an initial deposit can grow as the account earns interest. The two most important variables on this calculator are your starting balance and the account's annual percentage yield (APY).

As interest is credited to an account, that interest can become part of the balance that earns future interest. This process is known as compound interest. Consequently, keeping money in an interest-bearing account for longer periods can increase the dollar amount earned.

If you want to model compound growth using additional assumptions, visit our compound interest calculator.

How Does APY Affect Your Savings?

Annual percentage yield (APY) measures the amount of interest an account can earn over one year while accounting for compounding. Therefore, APY is generally the most useful figure for comparing the earning potential of savings accounts.

For example, if two savings accounts have the same starting balance but one offers a higher APY, the higher-APY account will generally produce more interest as long as the APYs remain unchanged and other account conditions are equal.

APY should not be confused with the stated interest rate. The interest rate does not itself account for compounding, while APY incorporates its effect. This is one reason banks commonly advertise savings products using APY.

However, most savings account APYs are variable. A bank may raise or lower its rate after an account has been opened. Therefore, a multi-year projection using today's APY should be viewed as an estimate of what could happen if that APY remained constant.

High-Yield Savings vs. the National Average

High-yield savings accounts generally aim to pay substantially more interest than lower-yield traditional savings accounts. Even when the percentage-point difference looks small, the difference in dollars can become more noticeable with larger balances or longer savings periods.

The calculator makes that difference easier to see by applying a high-yield savings APY and the national average savings rate to the same starting balance and time period.

However, APY is only one factor to consider when choosing an account. Minimum deposit requirements, balance requirements, monthly fees, withdrawal options, transfer speeds and account access can also affect whether an account is a good fit.

You can compare these features alongside rates in our guide to the best high-yield savings accounts or review current savings account rates.

What Affects How Much Interest Your Savings Earn?

Several factors determine how quickly a savings balance grows. Most importantly, consider the APY, the amount deposited and how long the money remains in the account.

• Starting balance: A larger balance generally earns more interest at the same APY.
• APY: A higher APY increases the amount of interest an account can earn when other factors remain equal.
• Time: Leaving money deposited for longer gives compound interest more time to affect the balance.
• Additional deposits: Adding money over time can increase the balance available to earn interest. The current calculator's estimate is based on the initial deposit shown rather than a schedule of recurring contributions.
• Withdrawals: Taking money out reduces the balance available to earn future interest.
• Rate changes: Variable savings APYs can increase or decrease, causing actual earnings to differ from a projection based on today's rate.
• Fees: Account fees can reduce the net benefit of the interest you earn.

How to Interpret Your Savings Calculator Results

The projected ending balance represents your starting deposit plus estimated interest over the selected time period. Meanwhile, the comparison between the high-yield account and national average helps illustrate the potential opportunity cost of keeping savings in a lower-yield account.

For the most useful comparison, try several starting balances and time periods. For example, you can compare one year with five years to see how time changes the dollar difference between two APYs.

Nevertheless, the calculator cannot predict future savings rates. It also cannot account for every bank's balance tiers, promotional requirements, fees, withdrawals or other account-specific terms. Before opening an account, review the financial institution's current disclosures and eligibility requirements.

Frequently Asked Questions About Savings Calculators