Finder makes money from featured partners, but editorial opinions are our own. Advertiser Disclosure

Compare savings accounts with compound interest: How it works

Increase your earnings exponentially with a compounding account.

Compare savings accounts by compound interest

Use the table below to compare accounts based on the features you’re looking for.

Name Product Interest compounding Annual percentage yield (APY) Fee Minimum deposit to open
Aspiration Spend & Save Account
$0 per month or $7.99 per month for Aspiration Plus ($5.99 per month if you pay annually)
Deposits are fossil fuel-free. A spend and save combo account with unlimited cash back rewards and deposits insured by the FDIC and a $100 bonus when you spend $1,000 in your first 60 days.
Quontic Bank High Yield Savings
Interest is compounded daily. No monthly service fees. Competitive rates
Axos Bank High Yield Savings
No monthly maintenance fees. No minimum balance requirements. Interest compounded daily.
American Express® High Yield Savings
Enjoy no monthly fees and a competitive APY with this online-only savings account. Accounts offered by American Express National Bank, Member FDIC.
Gemini Earn
Gemini Earn
Up to 8.05%
Watch your cryptocurrency earn up to 8.05% APY with this nationwide account. Not FDIC insured.

Compare up to 4 providers

Most savings accounts have interest that compounds on a daily or monthly basis, but you might find some that compound on a quarterly or annual basis. The interest rate set by the bank and how often it compounds can make all the difference. If your account compounds on a daily basis, your savings could grow faster than it would if it compounded on a quarterly or yearly basis.

When comparing savings accounts, keep an eye out for the rate, how often it compounds, and any requirements you’re expected to meet, such as a tiered minimum balance or a required checking account.

How does compound interest affect my savings account?

To get the most out of compound interest, deposit as much as you can into your account and limit any withdrawals from it, whether for bills or fun money. The more that’s in your account at the end of the month, the more interest you’ll earn. Even if you can’t deposit extra money into your account, your balance continues to grow as your interest compounds each month.

Depending on the interest rate and your balance, the difference between daily, monthly and yearly compounding might only amount to a matter of pennies. But if you have a high balance and a high interest rate, the difference in compounding frequency could add up to a decent chunk of change.

Compound interest example

Here’s a breakdown of how much interest $10,000 would earn in a 1% APY savings account over the course of 10 years based on whether interest compounds yearly, monthly or daily. For simplicity’s sake, this example assumes no additional contributions are made to the account.

1 year$10,100.00$10,100.46$10,100.50
2 years$10,201.00$10,201.93$10,202.01
3 years$10,303.01$10,304.42$10,304.54
4 years$10,406.04$10,407.93$10,408.10
5 years$10,510.10$10,512.49$10,512.70
6 years$10,615.20$10,618.10$10,618.36
7 years$10,721.35$10,724.77$10,725.07
8 years$10,828.57$10,832.51$10,832.86
9 years$10,936.85$10,941.33$10,941.73
10 years$11,046.22$11,051.25$11,051.69

How do I make the most of my compound interest?

To get the most out of an account with compound interest, save as early as possible and avoid unnecessary withdrawals.

  • Stay on top of your monthly minimum. Some accounts require a minimum monthly balance before requiring a fee. Keep more money in your own pocket by meeting that minimum.
  • Deposit what you can. Because compound interest helps your money make money, you can increase your earnings with routine deposits to your savings balance.
  • Avoid fees. Many banks waive fees for linking your savings and checking, directly depositing your paycheck or signing up for autopay. Ask about ways for you to get a leg up on your savings.

How to compare compound interest

The more frequently your interest compounds, the quicker your money will grow. There are generally four types of compounding interest:

  • Daily. This is the quickest way to grow your money because interest is added to your account balance every day. Most savings accounts compound interest daily and post earnings to your account monthly.
  • Monthly. Interest is calculated on your account once per month. Your balance doesn’t grow as fast as it would with daily compound interest, but it’s still quicker than other frequencies.
  • Quarterly. With quarterly compounding, interest is calculated once every three months. Although uncommon, this compounding period is still used by some credit unions.
  • Annually. As the name suggests, annual compound interest is calculated once a year. This compounding period is most commonly used with investment accounts.

Want to see how much you could earn with daily compound interest? Use a compound interest calculator to estimate your savings growth.

What are the pros and cons of compound interest?

Compound interest is an incredible benefit. But it’s only one element to consider when shopping for a savings account.


  • Accessibility. Many savings accounts with compound interest allow you to withdraw or deposit whenever you need to. Meaning you can save and still easily access your money in an emergency.
  • Lower balance requirements. You can often stay in your bank’s good graces with a low balance.
  • Introductory rates. To compete for your business, many banks and credit unions offer higher introductory interest rates on savings accounts for a set time.
  • Increased earnings. With compound interest, your earnings increase exponentially — as long as you don’t withdraw funds.


  • Lower rates. Annual interest rates may not be as strong as money market accounts and CDs, which typically offer higher rates because interest isn’t compounded monthly.
  • Availability of funds. For some people, open access to savings is a drawback. You can easily dip into it for daily needs, ending up losing a portion of your interest earnings.
Back to top

What is interest?

In the context of lending, interest is the cost of borrowing money. When you take out a loan, you typically pay interest as a percentage of the principal amount at an agreed rate.

When it comes to savings accounts or investments, interest is the money you earn for allowing the bank, credit union or other financial institution access to your money. When you deposit your money into an interest-bearing account, you’re effectively lending money to the bank. Pooling together its members money is how banks and other lenders provide loans to borrowers, among other banking activities.

Many factors play into the amount of interest you ultimately receive, including:

  • The interest rate
  • How it’s calculated — for example, daily or monthly
  • How often it’s compounded and paid

The interest rate is often expressed as an annual percentage. The higher the interest rate you’re offered, the stronger your return.

Back to top

How can I find my monthly interest rate?

Your provider should prominently advertise the monthly variable interest rate under the product description for the particular account you’re looking at. It’s how they entice you to do business with them, and not a competitor.

If you’re not sure where to start, read our comprehensive guide to interest rates to see popular high-interest savings accounts. Note that interest rate are often variable, meaning they can change according to the federal interest rate.

Frequently asked questions

More guides on Finder

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site