How this calculator works
Your APY is converted to an equivalent monthly rate. Each month the balance earns that rate and your monthly deposit is added. The ending balance minus everything you deposited is the interest earned.
Worked example
With the example values below: Balance after 5 years, $26,015 ($3,015 of that is interest). Change any number above to run your own.
What you enter
| Input | Example |
|---|---|
| Initial deposit | $5,000 |
| Monthly deposit | $300 |
| APY | 4.1% |
| Years | 5 yrs |
APY vs. interest rate
Savings accounts advertise an annual percentage yield (APY). APY already includes the effect of compounding, so it tells you what $1 grows to in a year if you leave the interest in the account. The plain interest rate (sometimes called APR on deposit accounts) doesn't include compounding and is always a little lower when interest compounds more than once a year.
Because APY is standardized, it's the number to compare between banks. A 4.00% APY earns $400 on $10,000 in a year, whether the bank compounds daily or monthly.
How monthly deposits change the outcome
Regular deposits usually matter more than the rate. At a 4% APY, $10,000 left alone grows to about $12,170 in five years. Add $300 a month and it reaches about $32,000, and most of that difference is your own deposits, not interest.
Interest still compounds on every deposit once it's in the account, so the earlier in the period you add money, the more it earns. Automating a transfer on payday is the simplest way to keep deposits consistent.
Choosing where to keep savings
Different accounts suit different goals:
- High-yield savings accounts, usually at online banks, often pay several times the national average rate and let you withdraw any time.
- Money market accounts pay similar rates and sometimes include check-writing or a debit card.
- Certificates of deposit lock in a rate for a fixed term; see the CD calculator to compare terms.
- Treasury bills pay competitive yields that are exempt from state income tax; see the Treasury bill calculator.
Safety and taxes
Deposits at FDIC-insured banks (or NCUA-insured credit unions) are protected up to $250,000 per depositor, per institution, per ownership category. Savings interest is taxed as ordinary income in the year it's paid, and your bank sends Form 1099-INT if you earn $10 or more.
Variable savings rates can change at any time, so treat any long-term projection as an estimate. If you're saving for a specific target, the savings goal calculator works backwards from the amount and the deadline.
Frequently asked questions
How much will I have if I save $500 a month?
At a 4% APY, saving $500 a month from zero gives you about $6,110 after one year, $33,100 after five years and $73,300 after ten years. About $13,300 of the ten-year total is interest.
How is interest on a savings account calculated?
Most banks calculate interest daily on your balance and pay it monthly. The APY reflects that compounding, so multiplying your balance by the APY gives a close estimate of a year's interest if the balance stays the same.
What is a good APY for a savings account?
Rates move with the Federal Reserve's policy rate. A good high-yield savings account pays several times the national average and is close to the yield on 3-month Treasury bills. Compare current offers rather than relying on a fixed number.
Is savings account interest taxable?
Yes. Interest is taxed as ordinary income at your federal rate and usually your state rate, in the year it's credited. Banks report it on Form 1099-INT when it's $10 or more for the year.
How often does a savings account compound?
Most compound daily or monthly. The difference between them is tiny; at 4%, daily compounding earns less than $0.10 more a year on $1,000 than monthly compounding. The APY already reflects whichever the bank uses.
Grow what this calculator projects.
TruthSayer AI sends quantitative stock signals across valuations, earnings and dark-pool activity, each one traded in its own funded account first.
Estimates for planning only, not financial, tax or legal advice. Tax tools use 2026 federal figures (brackets, $16,100 / $32,200 standard deduction, $19,000 gift exclusion, $15M lifetime exemption). Rates shown as defaults are examples; replace them with quotes you actually receive.