Savings
APY Calculator
See how your savings grow at a given Annual Percentage Yield over any time horizon. Enter a starting deposit, optional monthly contributions, and the APY on your account — we'll show the future balance and how much of it comes from compounding interest.
Savings
APY Calculator
Result
APY — Annual Percentage Yield — is the single most important number when comparing savings accounts, money market accounts, and CDs. It tells you the actual percentage your money grows each year, with compounding factored in. The gap between a high-yield savings account at 4.5% APY and a traditional bank's 0.05% APY isn't a small difference — it's a 90x difference in interest earned on the same money. This calculator shows you exactly what that gap looks like in dollars on your specific balance over your specific timeline.
How this calculator works
You enter four values and we project the future balance:
- Starting deposit. The initial amount in the account.
- Monthly savings. Any recurring monthly contribution. If you're just modeling the growth of an existing balance, enter 0.
- APY. The annual percentage yield on the account. Use the exact figure your bank quotes (e.g., 4.5%, 0.5%, 5.1%) — the calculator handles the compounding.
- Years. The time horizon you want to project.
The math runs compound interest forward month by month, applying the monthly equivalent of the APY plus any new monthly contributions. The output is the future balance plus a breakdown of how much came from your contributions versus from interest earned.
What your result actually tells you
Two numbers carry the most weight:
- Future balance. The total amount projected in the account at the end of the time horizon.
- Interest earned. How much of the future balance came from the APY rather than from your deposits. This is the "free money" component — interest, plus interest on the interest, compounding over the time horizon.
For short horizons (1-3 years), interest is a small share of the total. For longer horizons (10+ years), interest can become a meaningful portion of the balance. This is why time horizon matters so much for savings — the math gets dramatically better the longer the money compounds.
APY vs APR — they're not the same thing
This is one of the most common points of confusion in personal finance, and getting it right matters:
- APY (Annual Percentage Yield). What you earn on a savings product. Includes compounding.
- APR (Annual Percentage Rate). What you pay on a loan. Typically does not include compounding (one exception: credit cards effectively compound interest if you carry a balance).
On any single account, the APY is slightly higher than the nominal interest rate because of compounding. A 4.5% nominal rate compounded daily produces an APY of about 4.60%. The differences are small per year but add up over decades.
If your account has a 4.5% nominal rate and compounds daily, each day's interest is calculated on the current balance (which includes any previously earned interest). Over a full year, the small daily compounding adds about 0.10 percentage points of effective yield. Most savings accounts compound daily; CDs vary.
What's a "good" APY right now
APYs move with Federal Reserve policy, so "good" shifts over time. Here's a current snapshot of what's reasonable:
- High-yield savings accounts (HYSAs): 4% to 5%+ at top online banks (as of 2026). Marcus, Ally, CIT Bank, Discover, American Express, and SoFi typically lead.
- Traditional savings at brick-and-mortar banks: 0.01% to 0.5%. The Big Four banks rarely offer competitive rates on standard savings.
- Money market accounts: 3% to 5%, often with slightly higher minimum balance requirements than savings accounts.
- Short-term CDs (3-12 months): 4% to 5.5% currently, sometimes higher than HYSAs in exchange for locking up the money.
- Treasury bills (1-12 month): Similar yields to CDs, exempt from state income tax, backed by US government.
The single biggest mistake most people make with savings is leaving large balances in a low-APY account. On $10,000, the difference between 0.5% APY and 4.5% APY is $400 per year — money you're leaving on the table by not switching to a competitive account. The switch typically takes 15 minutes and is FDIC-insured.
The cost of leaving money in a low-APY account
Concrete numbers help here. Consider $10,000 saved for 10 years:
At 0.05% APY: $10,050 (gain: $50)
At 0.5% APY: $10,512 (gain: $512)
At 4.5% APY: $15,653 (gain: $5,653)
That's the cost of inertia. Moving the same $10,000 from a traditional bank to a high-yield online bank earns an extra $5,600 over 10 years — for doing nothing more than opening a new account.
For larger balances, the gap is proportionally larger. On $50,000, the same comparison produces a difference of nearly $28,000 over 10 years. This is the single highest-ROI move available to most savers, and it costs nothing.
Where to focus if you want to change the result
Beyond just picking the right account, several approaches help your APY work harder:
- Compare APYs across at least 3 online banks. Top rates shift monthly. Sites like Bankrate, NerdWallet, and DepositAccounts track current top APYs.
- Confirm FDIC or NCUA insurance. All deposits in member banks are insured up to $250,000 per depositor per institution. Always verify membership at the FDIC's BankFind tool before opening an account.
- Avoid promotional rates that drop after a few months. Some accounts offer 5%+ for 90 days then drop to under 2%. Read the fine print before opening.
- Ladder CDs for long-term savings. Splitting savings across CDs maturing at different intervals (e.g., one CD maturing each year for 5 years) gives you steady access to a portion while earning higher rates than savings on the locked portion.
- Consider Treasury bills for state-tax-exempt savings. If you're in a high-income-tax state, T-bills can produce higher after-tax yield than CDs at similar nominal rates.
- Watch out for inflation. A 4.5% APY when inflation is 3% gives you only ~1.5% real return. Savings accounts protect principal but don't aggressively grow purchasing power — over long horizons, investments outpace savings.
When this estimate won't be exact
The calculator assumes a few things that may differ in real accounts:
- Constant APY. Variable-APY accounts can change their rate at any time. Banks usually adjust when the Federal Reserve changes rates. If your savings horizon is long, plan for APYs to fluctuate.
- No taxes deducted. Interest earned in regular savings accounts is taxable as ordinary income. At a 22% federal bracket, a 4.5% APY effectively becomes about 3.5% after-tax.
- No fees. Some savings accounts have monthly maintenance fees if you fall below a minimum balance. Choose accounts with no fees or balances that comfortably exceed the minimum.
- Compounding frequency varies. The calculator uses monthly compounding. Some accounts compound daily, which produces marginally higher results. The differences are small for short horizons.
- Doesn't model inflation. The future balance is in nominal dollars — what those dollars will actually buy in the future depends on inflation between now and then.
Frequently asked questions
What is APY and how is it different from APR?
APY (Annual Percentage Yield) is the rate you earn on a savings account or CD, with compounding factored in. APR (Annual Percentage Rate) is what you pay on a loan, typically without compounding. A savings account quoting 4.5% APY pays slightly more than 4.5% in actual interest each year because the interest itself earns interest as it accumulates. APY is the better number for comparing savings accounts because it reflects what you'll actually earn.
What's a good APY on a savings account?
As of 2026, a good APY on a high-yield savings account is 4% or higher. Top-tier online banks offer 4.5% to 5% APY. Traditional brick-and-mortar banks often pay 0.01% to 0.5%, which is dramatically lower. APYs move with Federal Reserve policy, so what's competitive shifts over time. Comparing current rates at sites like Bankrate or NerdWallet is the easiest way to confirm you're getting a reasonable rate.
How is APY calculated?
APY accounts for compounding frequency. The formula is APY = (1 + interest_rate / n)^n - 1, where n is the number of compounding periods per year. A 4.5% nominal rate compounded daily produces an APY of about 4.60%. Compounded monthly, it's 4.59%. The more frequent the compounding, the higher the APY relative to the nominal rate. Most savings accounts compound daily.
Does APY change over time?
Yes. Variable-APY accounts (regular savings, money market, most high-yield savings) can change their rate at any time. Banks usually adjust APYs within days or weeks of Federal Reserve rate changes. CDs have fixed APYs locked in for the term — you trade flexibility for rate certainty. When planning long-term savings growth, use a conservative APY assumption since current rates may not last.
Is APY taxable?
Yes. Interest earned in regular savings accounts, money markets, and CDs is taxable as ordinary income at the federal level (and usually state level too). Banks issue a 1099-INT showing the interest earned in any year you earn $10 or more. The exception is tax-advantaged accounts like Roth IRAs and HSAs, where interest can grow tax-free under specific rules.
How much more does 5% APY earn vs 0.5% APY?
Substantially. On a $10,000 balance held for 5 years, 5% APY grows to roughly $12,762 — about $2,762 in interest. At 0.5% APY, the same balance grows to about $10,253 — only $253 in interest. That's a $2,500 difference for the same money, just because of the account it's sitting in. The gap grows wider on larger balances and longer time horizons.
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Before you act on this
WalletCalcs provides educational estimates only. Results are not financial, tax, lending, legal, or investment advice. APYs change, fees vary by institution, and tax rules differ by jurisdiction. Always confirm rates and terms directly with the financial institution before making decisions about where to keep your savings.