A savings account that pays compound interest grows in two ways: from the deposits you add, and from interest that itself earns interest. This calculator shows both, modeling a starting balance plus regular monthly deposits at your account’s rate.
The default reflects a high-yield savings account — $5,000 to start, $200 a month, 4.5% compounded daily over 10 years. Set the rate to your account’s APY to see your own numbers.
How savings account interest compounds
Most savings accounts compound daily and pay the interest into your balance monthly. Each deposit you make starts earning from the day it lands, and the interest you’ve already earned earns more — the snowball that makes compounding worthwhile even at modest rates.
Because the rate on a savings account can change over time (unlike a fixed CD), treat the projection as a snapshot at today’s rate. If rates rise or fall, rerun the numbers.
APY: the number that matters
Banks quote savings accounts by their APY, which already includes daily compounding — so APY is the figure to compare when you shop for an account. The difference between a traditional account paying near 0.5% and a high-yield account paying 4–5% is enormous over time, and it costs nothing to choose the better one.
The results above show the effective annual yield for your inputs, so you can confirm what a quoted rate really earns once compounding is counted.
High-yield vs traditional savings
High-yield savings accounts — often from online banks — frequently pay many times the rate of a big-bank account, with the same FDIC insurance and full access to your money. For an emergency fund or any cash you want safe and liquid, that higher APY is close to free money.
Savings accounts are ideal for short-term needs and cash you can’t risk. For money you won’t touch for many years, investing has historically earned more, and a fixed-term CD can lock in a rate if you don’t need access. Use the what-if chips and the cost-of-waiting view to see how much earlier saving changes the outcome.
Frequently asked questions
How much interest will I earn in a savings account?
It depends on your balance, deposits, and APY. For example, $5,000 plus $200 a month at 4.5% over 10 years earns several thousand dollars in interest. Enter your own figures above for an exact projection.
Is savings account interest compounded daily?
Usually, yes — most savings accounts compound interest daily and credit it monthly. The calculator is set to daily compounding by default to match.
What is a high-yield savings account?
It’s a savings account, often from an online bank, that pays a much higher APY than a typical big-bank account — frequently several percent — with the same FDIC insurance and full access to your money.
How is APY different from the interest rate?
The interest rate is the base (nominal) rate; APY is what you actually earn once compounding is included. APY is always at least as high as the nominal rate and is the right number for comparing accounts.