Savings Account Calculator

It works like any savings account, but with a higher rate. You deposit money, the bank pays interest, and you can withdraw when you need to, usually by transfer to a linked checking account. Many are offered by online banks, which may take a day or more to move funds. Rates are usually variable, so the bank can change them with little notice.

Divide the balance by 12 and multiply by the APY for a close estimate. At 4% APY, $10,000 earns roughly $33 a month, and $50,000 earns about $164. The amount rises slowly as interest compounds, and falls if the bank lowers its rate. The table above shows other balances and rates.

It's one well above the national average and competitive with other insured accounts today. Rates change, so check the FDIC's national rates for a baseline and compare a few current offers. Watch for promotional rates that only last a few months, or that apply only up to a limited balance. Consistency and no fees matter as well.

Yes, as long as the bank is FDIC insured or the credit union is NCUA insured and you stay within the limits. Coverage is $250,000 per depositor, per bank, per ownership category. Some fintech apps aren't banks, so check that your money is held at an insured partner bank and understand how the coverage applies. You can verify a bank with the FDIC's BankFind tool.

Interest is generally taxed as ordinary income in the year it's paid, at your regular federal rate, and usually by your state as well. Banks send Form 1099-INT if you earned $10 or more, but you owe tax on smaller amounts too. So at a 22% tax rate, a 4% APY keeps about 3.12% after federal tax. Your deposits themselves aren't taxed.

There's no limit, and some people like separate accounts or labeled "buckets" for different goals, such as a car, travel and an emergency fund. Many banks let you create buckets within one account. More accounts mean more logins and 1099s, so keep it manageable. If you hold more than $250,000 at one bank, spreading it out can keep it all insured.

A savings account lets you withdraw freely, but its rate can change at any time. A CD locks your money for a set term in exchange for a rate that's usually fixed, and early withdrawal generally costs a penalty. If you might need the money or expect rates to rise, savings offers flexibility. If you can commit and want certainty, a CD could fit better.

The federal six-per-month limit on savings withdrawals, known as Regulation D, was suspended in 2020. However, banks can still set their own limits and fees, so check your account's terms. Some bank accounts convert or close if you go over too often. This matters mainly if you're using savings like a checking account, which it's not designed for.

A common guideline is three to six months of essential expenses in an emergency fund, and more if your income is variable. Add anything you'll spend within a few years, such as a down payment. Beyond that, money in savings could lose ground to inflation over time. So once you're covered, consider investing for goals that are further off.

They don't run branch networks, so they have lower costs and can offer higher rates to attract deposits. Large traditional banks often pay very little because many customers stay for convenience. The trade-off is that online banks usually have no in-person service, and transfers can take longer. Your deposits are insured the same way, as long as the bank is FDIC insured.

Ideally, none. Many high-yield accounts have no minimum balance or monthly fee, so there's no need to pay for one. If an account requires a minimum to earn its top rate, make sure you'd meet it comfortably. A monthly fee can wipe out the interest on a small balance: a $5 monthly fee costs more than a $1,000 balance earns at 4%.