High Yield Interest Savings Account Calculator
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Reviewed by Calculator Editorial Team
High yield interest savings accounts offer competitive interest rates compared to traditional savings accounts. This calculator helps you determine how much interest you can earn on your savings with different APY rates and deposit amounts.
What is a High Yield Savings Account?
A high yield savings account is a type of savings account that offers an interest rate significantly higher than traditional savings accounts. These accounts are typically offered by online banks and credit unions, and they provide a safe place to park your money while earning competitive returns.
High yield savings accounts are FDIC-insured up to $250,000 per depositor, which means your money is protected in case the bank fails. They are a good option for individuals who want to earn more interest on their savings without taking on additional risk.
High yield savings accounts are different from certificates of deposit (CDs), which offer higher interest rates but typically require a longer commitment period.
How to Calculate High Yield Interest
The interest earned on a high yield savings account is calculated using the formula:
Interest = Principal × (APY ÷ 100) × (Time in Years)
Where:
- Principal is the amount of money you deposit into the account.
- APY (Annual Percentage Yield) is the annual interest rate offered by the savings account.
- Time in Years is the number of years the money will be in the account.
For example, if you deposit $1,000 at a 3.5% APY for 2 years, the interest earned would be:
Interest = $1,000 × (3.5 ÷ 100) × 2 = $70
This means you would earn $70 in interest over the 2-year period.
High Yield Savings Account Comparison
Here's a comparison of some popular high yield savings accounts based on their APY rates and minimum deposit requirements:
| Bank | APY | Minimum Deposit | FDIC Insured |
|---|---|---|---|
| Ally Bank | 4.20% | $0 | Yes |
| Capital One 360 | 4.15% | $0 | Yes |
| Discover Bank | 4.10% | $0 | Yes |
| Marcus by Goldman Sachs | 4.30% | $0 | Yes |
| Sofi | 4.60% | $0 | Yes |
This table provides a quick reference for comparing different high yield savings accounts. The APY rates and minimum deposit requirements may vary, so it's important to check the most current information from each bank.
Frequently Asked Questions
What is the difference between APY and APR?
APY (Annual Percentage Yield) is the actual annual interest rate you earn on your savings, taking into account the effect of compounding interest. APR (Annual Percentage Rate) is the stated interest rate before compounding is taken into account. APY is always higher than APR.
Are high yield savings accounts FDIC-insured?
Yes, high yield savings accounts are typically FDIC-insured up to $250,000 per depositor, just like traditional savings accounts. This means your money is protected in case the bank fails.
Can I withdraw money from a high yield savings account anytime?
Yes, most high yield savings accounts allow you to withdraw money at any time without penalties. However, some accounts may have a limited number of free withdrawals per month, so be sure to check the terms and conditions.
How often is interest calculated and paid on high yield savings accounts?
Interest is typically calculated daily and credited to your account monthly. The interest is usually paid out at the end of each month, though some banks may offer quarterly or annual payouts.