Project your balance with monthly deposits — and see how much a high-yield account earns over a big-bank one.
Ending balance
$45,958
About $39,644 in today's money.
Extra earned over 0.45% APY.
Rough estimate at a 24% marginal rate.
After 3% inflation.
Starting with $10,000 and adding $500 a month for 5 years, you put in $40,000 of your own money and earn $5,958 in interest at 4.50% APY. Interest compounds on interest, so the longer the horizon, the larger that second number grows relative to your deposits.
The national-average savings rate sits near 0.45%, while competitive high-yield accounts pay several times more. On these same deposits, a 0.45% account would leave you with $40,561 — so the high-yield account earns an extra $5,397 for the exact same money, risk and effort. Both are FDIC-insured; the only difference is the rate.
Savings interest is taxed as ordinary income at your marginal rate, plus state tax where it applies. At a 24% federal rate, 4.50% APY is closer to 3.42% after tax. After 3% inflation, the $45,958 balance has the purchasing power of about $39,644 in today's money. High-yield savings is the right home for cash you need to keep safe and liquid — but for long-term goals, it rarely outpaces inflation after tax.
Because a savings rate is modest, your contribution — not the interest — drives most of the balance. Raising the monthly deposit from $500 to $1,000 lifts the ending balance to $79,454. In a savings account, how much you add matters far more than a fraction of a percentage point of yield.
Cash you might need within a few days belongs in high-yield savings. If you can lock money away for a fixed term, a CD often pays a bit more, and for money you won't touch for 5+ years, investing has historically beaten cash after inflation. Size your emergency fund first, then decide where the rest belongs.
Size your emergency fundWorked scenarios with the full analysis, so you can see how the numbers move before entering your own.
A saver building a cash cushion in a competitive high-yield account with steady monthly deposits.
Ending balance
$45,958
Starting with $10,000 and adding $500 a month for 5 years, you put in $40,000 of your own money and earn $5,958 in interest at 4.50% APY. Interest compounds on interest, so the longer the horizon, the larger that second number grows relative to your deposits.
The national-average savings rate sits near 0.45%, while competitive high-yield accounts pay several times more. On these same deposits, a 0.45% account would leave you with $40,561 — so the high-yield account earns an extra $5,397 for the exact same money, risk and effort. Both are FDIC-insured; the only difference is the rate.
Savings interest is taxed as ordinary income at your marginal rate, plus state tax where it applies. At a 24% federal rate, 4.50% APY is closer to 3.42% after tax. After 3% inflation, the $45,958 balance has the purchasing power of about $39,644 in today's money. High-yield savings is the right home for cash you need to keep safe and liquid — but for long-term goals, it rarely outpaces inflation after tax.
A fully funded emergency fund with no further deposits, showing pure interest compounding over time.
Ending balance
$31,529
Starting with $25,000 and adding $0 a month for 5 years, you put in $25,000 of your own money and earn $6,529 in interest at 4.75% APY. Interest compounds on interest, so the longer the horizon, the larger that second number grows relative to your deposits.
The national-average savings rate sits near 0.45%, while competitive high-yield accounts pay several times more. On these same deposits, a 0.45% account would leave you with $25,568 — so the high-yield account earns an extra $5,961 for the exact same money, risk and effort. Both are FDIC-insured; the only difference is the rate.
Savings interest is taxed as ordinary income at your marginal rate, plus state tax where it applies. At a 24% federal rate, 4.75% APY is closer to 3.61% after tax. After 3% inflation, the $31,529 balance has the purchasing power of about $27,197 in today's money. High-yield savings is the right home for cash you need to keep safe and liquid — but for long-term goals, it rarely outpaces inflation after tax.
A three-year savings push toward a down payment, where contributions dominate and the account keeps the cash safe.
Ending balance
$43,943
Starting with $5,000 and adding $1,000 a month for 3 years, you put in $41,000 of your own money and earn $2,943 in interest at 4.25% APY. Interest compounds on interest, so the longer the horizon, the larger that second number grows relative to your deposits.
The national-average savings rate sits near 0.45%, while competitive high-yield accounts pay several times more. On these same deposits, a 0.45% account would leave you with $41,305 — so the high-yield account earns an extra $2,638 for the exact same money, risk and effort. Both are FDIC-insured; the only difference is the rate.
Savings interest is taxed as ordinary income at your marginal rate, plus state tax where it applies. At a 24% federal rate, 4.25% APY is closer to 3.23% after tax. After 3% inflation, the $43,943 balance has the purchasing power of about $40,214 in today's money. High-yield savings is the right home for cash you need to keep safe and liquid — but for long-term goals, it rarely outpaces inflation after tax.
The same starting balance earning a typical brick-and-mortar rate, to contrast with a high-yield account.
Ending balance
$40,561
Starting with $10,000 and adding $500 a month for 5 years, you put in $40,000 of your own money and earn $561 in interest at 0.45% APY. Interest compounds on interest, so the longer the horizon, the larger that second number grows relative to your deposits.
Savings interest is taxed as ordinary income at your marginal rate, plus state tax where it applies. At a 24% federal rate, 0.45% APY is closer to 0.34% after tax. After 3% inflation, the $40,561 balance has the purchasing power of about $34,988 in today's money. High-yield savings is the right home for cash you need to keep safe and liquid — but for long-term goals, it rarely outpaces inflation after tax.
Because a savings rate is modest, your contribution — not the interest — drives most of the balance. Raising the monthly deposit from $500 to $1,000 lifts the ending balance to $70,894. In a savings account, how much you add matters far more than a fraction of a percentage point of yield.
A high-yield savings account (HYSA) is a regular, FDIC-insured savings account that pays a much higher interest rate than a traditional bank — often several percentage points more. They're usually offered by online banks, which pass on the savings from having no branch network in the form of a better rate.
The money is just as safe as at a big bank: deposits are insured up to $250,000 per depositor, per institution, per ownership category. The account is fully liquid, meaning you can withdraw or transfer without penalty, which is what separates it from a CD. For an emergency fund or any short-term savings goal, it's the default choice.
APY — annual percentage yield — already includes the effect of compounding within the year, which is why it's the only fair way to compare accounts. An account compounding daily at a given rate has a slightly higher APY than one compounding monthly at the same rate. US institutions are required to disclose APY for exactly this reason.
This calculator takes the APY you enter and models monthly contributions growing at that yield, so the ending balance reflects both your deposits and the compounding. The key insight for savers: in a savings account, your contribution amount usually matters far more than the difference between, say, 4.3% and 4.6% APY.
Two forces quietly erode savings interest. First, tax: interest is taxed as ordinary income at your marginal federal rate plus any state tax, so a 4.5% APY at a 24% bracket is really about 3.4% after tax. Second, inflation: if prices rise 3% a year, that 3.4% after-tax return is barely keeping pace with the cost of living.
This is not an argument against high-yield savings — cash you need to be safe and liquid should absolutely earn the best insured rate available. It's an argument about matching the tool to the job. For money you won't need for five or more years, the after-tax, after-inflation return on cash is usually too low, and investing has historically done far better despite its short-term volatility.
Traditional banks often pay under 0.5% while high-yield accounts pay several times more, for the same insurance and liquidity. Not moving the money is leaving free interest on the table.
Switching for 0.1% more APY rarely justifies the hassle. Your contribution amount drives the balance far more than a tiny rate edge.
Cash rarely beats inflation after tax. Money you won't need for 5+ years usually belongs invested, not sitting in a savings account.
Savings interest is ordinary income. Budgeting your return at the full APY overstates what you actually keep.
Balances above $250,000 per depositor, per bank, per ownership category aren't insured. Spread very large balances across institutions.
It depends on your balance, APY, monthly deposits and time. Enter them above for an exact figure. As an example, $10,000 plus $500 a month at 4.5% APY earns roughly $4,000 in interest over five years, finishing near $44,000 on $40,000 of deposits. The higher your balance and the longer the horizon, the more compounding contributes.
The interest rate is the simple annual rate, while APY (annual percentage yield) includes the effect of compounding within the year, so APY is always equal to or higher than the stated rate. Always compare accounts by APY — it's the apples-to-apples number, and US banks are required to disclose it.
Yes, when the bank is FDIC-insured (or NCUA-insured for credit unions) and your balance stays within the $250,000 per depositor, per institution, per ownership category limit. Online banks offer higher rates because they have lower overhead, not because they take more risk with your deposits.
Almost always, for cash you want safe and liquid. The rate difference between a big-bank account near 0.45% and a competitive high-yield account above 4% is often more than 3.5 percentage points — over $350 a year on a $10,000 balance, for a single transfer and no added risk. It's one of the easiest wins in personal finance.
Yes. Interest is taxed as ordinary income at your marginal federal rate, plus state tax where applicable, and the bank reports it on Form 1099-INT if it exceeds $10 in a year. That's why the after-tax return on cash is lower than the headline APY, and why savings is best for short-term goals rather than long-term growth.
Match the account to the timeline. Money you may need within a few years — an emergency fund, a near-term down payment — belongs in high-yield savings, where it's safe and liquid. Money you won't touch for five or more years has historically grown far more when invested, despite short-term ups and downs, because cash rarely beats inflation after tax.
The next calculations that usually follow this one.
Sized on essential expenses and your actual risk profile — not a generic three-to-six months.
See the balance, the split between contributions and growth, and what it actually buys.
Work backwards from the number you need to the monthly amount that gets you there.
Translate future dollars into today's purchasing power — the adjustment most plans skip.
Built on take-home pay, with the annual costs that break most monthly budgets.
Guides that explain the decisions behind these numbers.
How to size an emergency fund on essential expenses, where to keep it, and why it comes before aggressive debt payoff or investing.
Updated January 15, 2026
How to build a budget on take-home pay using the 50/30/20 framework, account for irregular annual costs, and fix the categories that actually matter.
Updated January 15, 2026
How inflation erodes purchasing power, what protects against it, and why every long-range financial projection needs an inflation adjustment.
Updated January 15, 2026
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