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Savings calculator: How much interest will you get?

Use a savings account calculator to see how much interest you can earn with your high-yield savings account.

This article was reviewed by Marguerita Cheng, a member of the Finder Editorial Review Board and award-winning advocate for ethical financial planning for over 20 years.

If you’re saving for a specific goal, like a down payment for a house or the price of a round-the-world vacation, use a savings calculator to calculate how much you need to set aside each month to reach your goal. By entering a few details, you can easily figure out how much you can save for up to 40 years.

How do I use the savings calculator?

Calculate your earnings power in six steps.

  1. Enter your initial deposit amount. This is the one-time deposit you’ll make into the account when you open it. Enter 0 if you’re starting from scratch.
  2. Enter your ongoing deposit amount. Type the amount you will regularly deposit into your account.
  3. Choose your payment frequency. Making regular payments into your account is an excellent way to boost your savings balance. Choose from weekly, biweekly or monthly payments.
  4. Enter the interest rate. Enter the amount of interest you suspect to earn in your account.
  5. Select your length of time. How long will you be putting away money in your savings account? Choose terms from 1 to 40 years. Calculate your savings using different lengths of time to see how your daily interest builds over time.
  6. Hit calculate. The savings calculator crunches the numbers and tells you the total amount you’ll save, your total deposits and interest.

What’s the difference between a simple and compound interest calculator?

A simple interest calculator calculates the interest you’ll earn on your principal over a period of time. The amount of simple interest doesn’t change.

On the other hand, a compound interest calculator takes into account your principal balance and any interest you’ve accumulated previously. The calculator takes your earned interest and reinvests it by adding it to your principal before calculating the next interest period.

How to calculate interest on your savings account

Calculating compound interest is complicated. You’ll save a lot of time by using an online calculator. But if you want to do it by hand, here’s the equation:

[A = P(1 + {rover n})^{nt}]

Here’s a deeper look at what each of these variables mean:

  • P is your principal balance or initial deposit amount.
  • r is your account’s interest rate, written as a decimal. So if your APY is 1%, r is 0.01.
  • n is the number of times your account compounds each year. Enter 365 for daily, 12 for monthly, 6 for semi annually, 4 for quarterly or 1 for annually.
  • t is the length of time you plan on keeping money in the account, expressed in years.
  • A is how much your savings account balance will be at the end of the time period.

Suppose you make a $5,000 deposit in a savings account earning 2% APY, compounded daily. Here’s how you’d calculate your interest after five years using the order of operations:

  • A = $5,000 (1+0.02/365) ^ (365*5)
  • A = $5,000 (1+0.00005479452) ^ (365*5)
  • A = $5,000 (1.00005479452) ^ (365*5)
  • A = $5,000 (1.02020078103)
  • A = $5525.84

Your savings account balance would be $5525.84 in five years, which means you’ll have earned $525.84 in interest.

Compare savings rates

Name Product Annual Percentage Yield (APY) Fee Minimum deposit to open Interest compounding Offer
Aspiration Spend & Save Account
Finder Rating: 4.2 / 5: ★★★★★
Aspiration Spend & Save Account
Up to 5.00%
$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.
CIT Savings Connect
Finder Rating: 5 / 5: ★★★★★
CIT Savings Connect
Earn an impressive APY on your entire balance. This straightforward online savings account has no monthly service or account opening fees.
Bread Savings™ High-Yield Savings
Finder Rating: 4.3 / 5: ★★★★★
Bread Savings™ High-Yield Savings
Earn competitive interest rates with this high-yield savings account you can open in just minutes. Member FDIC.
Axiom Bank high-yield savings account
Axiom Bank high-yield savings account
UFB Rewards Savings
Finder Rating: 5 / 5: ★★★★★
UFB Rewards Savings
Earn a 2.61% APY with no minimum deposit or balance amount with this no-monthly-fee savings account.
Quontic Bank High Yield Savings
Finder Rating: 4.6 / 5: ★★★★★
Quontic Bank High Yield Savings
Interest is compounded daily. No monthly service fees. Competitive rates

Compare up to 4 providers

How is interest calculated on savings accounts?

Savings account interest is calculated as a percentage of your total deposit balance, such as 1% APY (annual percentage yield). Most rates are variable, which means your bank can raise or lower rates as the economy fluctuates.

Most banks calculate interest daily or monthly and deposit it into your account monthly. You’ll earn the most money with accounts that compound daily. If left alone, your interest can compound exponentially, making you even more money.

Why do I need to find the best interest rate?

Generally, the higher the interest rate, the greater the earning power. Even a small difference in interest rates can have a substantial effect on your overall savings, so compare a range of savings accounts and shop around for the best possible rate.

The average interest rate for savings accounts in the US is currently 0.05% APY, but many banks offer much better rates. Banks have their own way of calculating interest based on the savings account you choose, so use free interest calculators to get a realistic idea of how much you’ll earn across each type.

How much interest can you get on $1,000 in a savings account?

As an example, let’s consider the case of Mark, a 25-year-old customer service consultant from Ohio. Having spent money as fast as he earned it throughout his 20s, Mark is ready to start putting some money aside monthly to save for a down payment on a house. He has $1,000 to save and plans to deposit an extra $100 each week, so Mark decides to calculate the difference between two savings accounts — one that pays 2.5% and another that pays 3%.

Account AAccount B
Interest rate2.5% APY3% APY
Initial deposit$1,000$1,000
Ongoing weekly deposit$100$100
Amount saved after 1 year$6,289.57$6,307.69
Amount saved after 3 years$17,273.73$17,412.77
Amount saved after 5 years$28,820.91$29,204.34

As you can see, by choosing the account with a 0.5% higher interest rate, at the end of five years Mark will have saved an extra $383.43.

How long will my savings last?

This table highlights how long your money would last if you had a $10,000 starting balance in a savings account earning 1% interest and withdrew $200, $500 or $1,000 a month.

$200 monthly withdrawal$500 monthly withdrawal$1,000 monthly withdrawal
Interest rate1% APY1% APY1% APY
Initial deposit$10,000$10,000$10,000
Ongoing monthly withdrawal$200$500$1,000
Your money would run out in…51 months21 months11 months

How much should I have in my savings?

There’s no right answer for how much you should have in your savings account. If you’re using it as an emergency fund, it’s recommended to save three to six months of basic expenses. If you’re using it to save for a house or a vacation, those numbers will look different.

Though interest rates help your savings grow, making regular contributions or deposits is the best way to see your growth over time. Setting aside a portion of your regular paycheck — even if it’s only $20 some weeks — will help you reach your goals a whole lot quicker.

Setting up an automatic deposit from your paycheck each pay period is an easy way to save without thinking about it.

Roberta’s regular deposits

Roberta is 18 years old and doesn’t have a particular savings goal in mind, but she wants to start putting money aside for the future. Her grandmother gave her a $1,000 check for her 18th birthday, and Roberta decides to deposit the money into a savings account. However, she also vows to become a more disciplined saver and start putting money aside regularly.

Roberta doesn’t save any money from her weekly paycheck, but realizes that cutting back on online shopping could save her $50 a week. If she cuts other unnecessary expenses, like the gym membership she never uses, she can save $100 each week.

By depositing $100 a week Roberta can save $29,204.34 after five years — only $15,183.06 with $50 deposits weekly.

$0 weekly deposit$50 weekly deposit$100 weekly deposit
Interest rate3% APY3% APY3% APY
Initial deposit$1,000$1,000$1,000
Ongoing weekly deposit$0$50$100
Amount saved after 1 year$1,030.45$3,669.07$6,307.69
Amount saved after 3 years$1,094.15$9,253.46$17,412.77
Amount saved after 5 years$1,030.45$15,183.06$29,204.34

Why use a savings calculator?

Calculators are a fast way of predicting how your money will grow over time. Remember that a calculator is only as accurate as the information you put into it. If you don’t accurately represent your savings patterns and interest, your results won’t be accurate. Be honest about what you’re willing to set aside each week or month to get an accurate projection.

Bottom line

A savings calculator helps you project how much you need to save to reach your financial goals. Play around with the ongoing deposit amount and timeline to see how much you could earn overtime. Reach your savings goals even quicker with a high-yield savings account with little to no fees.

Frequently asked questions

What amount of interest earned on a savings account taxed?

To find out more about what kind of taxes you’ll have to pay on your earned interest, read this guide to taxes on savings accounts.

Picture: Shutterstock

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