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Best for online savings
Barclays Online Savings
APY
2.25%
Fee
$0 per month
Best for cashback savings
Aspiration Spend & Save Account
APY
5.00%
3.00%
Fee
From $0 per month
Best for high APY
Quontic Bank High Yield Savings
APY
2.15%
Fee
$0 per month
While there are other types of accounts that compound interest, savings accounts are the most well known and often the most flexible. If you’re looking for a compound interest account, these are a good place to start. Select up to four accounts and click “Compare” to see how they stack up side-by-side.
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.
Here are seven of the most popular accounts that compound interest:
The more frequently your interest compounds, the quicker your money will grow. There are generally four types of compounding interest:
Want to see how much you could earn with daily compound interest? Use a compound interest calculator to estimate your savings growth.
When comparing savings accounts there are a few important considerations to determine the best one for your needs.
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.
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.
| Yearly | Monthly | Daily | |
|---|---|---|---|
| 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 |
To get the most out of an account with compound interest, save as early as possible and avoid unnecessary withdrawals.
Compound interest is an incredible benefit. But it’s only one element to consider when shopping for a savings account.
Yes, provided the account is insured by the FDIC. Most reputable banks and accounts are FDIC-insured, which protects up to $250,000 of your investment. Accounts that don’t offer this insurance are much riskier.
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 is often expressed as an annual percentage. The higher the interest rate you’re offered, the stronger your return.
Back to topYour 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.
To determine if the interest is compounded daily, look at how interest is calculated and when it’s paid. Interest that’s paid monthly is compounded monthly, but you’ll need to read the fine print or call a rep to find out how your account works.
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.
Understand what a savings account has to offer you with our savings account guide.
This buy now, pay later service has stepped into the savings account game. But is it worth it?
A free savings account with an industry-leading APY — but only one way to grab your money.
The Patriot Bank High-Yield Money Market Deposit account is a free savings account that earns 0.55% APY.
A free savings account that earns a strong APY once you meet the $100 opening deposit requirement.
A kids savings account that comes with an ATM card that duals as a debit card.
Designed for kids age 12 and younger who live in select Utah counties.
USAlliance MyLife Savings for Kids earns 2% APY but only on balances up to $500.
MACU’s Teen Savings account earns little interest but remains free until your kid turns 26.
Prime Alliance Bank offers competitive interest rates on its money market accounts, but you won’t get any paper checks or debit cards.
