High-Yield Savings Calculator

The short answer

• The FDIC national average savings rate was 0.37% on September 21, 2026. Top online high-yield accounts paid around 4% to 4.3% APY in early October 2026.
• On $10,000 for a year, that is about $400 of interest instead of $37.
• $10,000 plus $200 a month for 5 years grows to $25,402 at 4%, against $22,296 at 0.37%: $3,106 more.
• Both kinds are insured up to $250,000 per depositor, per bank, per ownership category, so the higher rate costs you no safety.

What a high-yield savings account is

There is no legal definition: "high-yield" simply means a savings account paying well above the average. Most are offered by online banks and some credit unions, which save on branches and pass part of the saving on as a higher rate. Many large branch banks still pay 0.01% to 0.10% on standard savings, which is why the national average stays low.

A high-yield account works like any savings account: you can add or take out money at any time, the balance can’t fall, and deposits are insured if the bank is FDIC-insured or the credit union NCUA-insured.

Rates in 2026

The FDIC publishes a national average for each kind of deposit account. On September 21, 2026, it was 0.37% for savings, 0.63% for money market accounts, 0.07% for interest checking and 1.73% for 12-month CDs. In early October 2026, the best widely available high-yield savings accounts paid around 4% to 4.3% APY, with some promotional rates higher for a few months.

A worked example

After federal tax at 22% on each year’s interest, paid from the account, the balances are $24,614 and $22,231, still $2,383 apart. The tax on the high-yield interest is $737 over the five years, against $65.

How the gap grows

The gap grows faster each year because the higher rate earns interest on interest. Our compound interest calculator shows the same effect over longer periods.

A year's interest by balance

On an emergency fund of $25,000, moving it is worth about $900 a year. On a $2,000 balance it is worth about $73, which may still be worth a few minutes of paperwork.

APY and how interest is paid

Banks must quote the annual percentage yield (APY) on savings accounts under the Truth in Savings Act. The APY includes compounding, so it is the figure to compare. Most high-yield accounts compound interest daily and credit it monthly. The calculator credits interest monthly at the rate that gives exactly the APY over a year, and adds your monthly deposit at the end of each month.

Variable rates and rate cuts

Savings rates are variable: the bank can change them at any time, and they usually follow the Federal Reserve’s rate decisions. Some headline rates are bonuses that last a few months or need a direct deposit.

In the example, if the high-yield rate drops one point to 3% after the first year, the balance after five years is $24,634, with $2,634 of interest: still $2,338 more than the regular account. Use the "rate change after year 1" option to test your own scenario. If you want a fixed rate, a CD locks one in for its term.

Tax on interest

Interest from savings accounts is taxed as ordinary income in the year it is credited, even if you don’t withdraw it. Your bank sends Form 1099-INT if you earn $10 or more, and you must report interest even if you don’t get one. Most states tax it too; nine states have no income tax on wages or interest.

The calculator takes your federal bracket and state rate from More options and shows the balance after tax. The higher your bracket, the smaller the after-tax gap, but the high-yield account always comes out ahead when its rate is higher. Our tax bracket calculator shows your federal bracket.

Interest, tax and inflation

What matters for buying power is the real return: interest after tax, minus inflation. At 4% with 22% federal tax, you keep 3.12%, and with 2.5% inflation the real return is about 0.60% a year. At 0.37%, the real return is about −2.08% even before tax, so money in a low-rate account loses buying power every year.

Fees and minimums

Most online high-yield accounts have no monthly fee and no minimum balance. Some branch savings accounts charge a monthly maintenance fee unless you keep a minimum balance or link a checking account. A $5 monthly fee wipes out more than a 0.37% account earns: in the example, $300 of fees over five years against $296 of interest, leaving $21,993 from $22,000 of deposits.

FDIC insurance and the $250,000 limit

Deposits at an FDIC-insured bank are insured up to $250,000 per depositor, per insured bank, for each ownership category: single accounts, joint accounts, certain retirement accounts and trust accounts are separate categories. Credit union deposits get the same cover from the NCUA. Insurance applies automatically; you don’t need to apply.

If your savings pass $250,000 at one bank in one category, spread them across banks or categories. Some fintech apps aren’t banks: they place your money with partner banks, and FDIC insurance protects you only if the partner bank fails, not if the app does. Check which bank holds your money.

Getting your money out

Transfers from an online high-yield account to your checking account usually take one to three business days, so keep a little cash in checking for same-day needs. In April 2020 the Federal Reserve removed the federal limit of six convenient withdrawals a month from savings accounts. Some banks still keep a monthly limit or charge for extra withdrawals, so read the account terms.

Money market accounts, CDs and T-bills

Money market accounts are insured deposit accounts that sometimes add checks or a debit card. Money market funds, sold by brokers, are not FDIC insured, though they are low risk. Treasury bill interest is exempt from state and local income tax, which can tip the balance in a high-tax state.

What to keep in one

• An emergency fund of three to six months of essential costs.
• Savings for goals within a few years: a down payment, a car, a wedding or a vacation. Our savings goal calculator sets the monthly amount.
• Money set aside for quarterly estimated taxes or an annual insurance bill.
• Cash waiting to be invested.

Choosing an account

• Is the bank FDIC-insured, or the credit union NCUA-insured?
• Is the rate standard, or a bonus for a few months or with conditions?
• Are there monthly fees, minimum balances or withdrawal limits?
• How quickly do transfers reach your checking account?
• Has the bank kept its rate competitive in the past, or does it lag when rates fall?

Switching banks

Opening an online savings account takes a few minutes with your Social Security number and ID. Link your current checking account, move the money, and keep the old account open until the first transfer arrives. If you have automatic transfers into savings, point them at the new account. There is no tax to pay on moving cash between banks.

Common mistakes

• Leaving savings at a big bank paying close to nothing out of habit.
• Chasing a promotional rate that falls after three months.
• Keeping long-term money in savings, where inflation and tax eat the interest.
• Going over $250,000 at one bank in one ownership category.
• Forgetting to report the interest on your tax return.

Couples and joint accounts

A joint savings account is its own FDIC ownership category, insured up to $250,000 for each co-owner, so a couple can hold up to $500,000 in joint accounts at one bank, plus $250,000 each in single accounts. Interest on a joint account is usually reported under the Social Security number of the first-named owner, but married couples filing jointly simply report it on their joint return.

Some couples keep one shared high-yield account for the emergency fund and household goals, and separate accounts for personal spending. Others open several "buckets" or sub-accounts at the same bank, one per goal, which many online banks offer at no cost. Naming each bucket after its goal makes it easier to leave the money alone until it is needed.

Using savings with other accounts

A high-yield account works best as one layer of a plan. A common order is: one month of spending in checking for bills, three to six months of essential costs in a high-yield savings account for emergencies, money for goals one to five years away in savings, CDs or Treasury bills depending on when you need it, and long-term money in a 401(k), IRA or brokerage account.

If you hold a large cash balance and can wait for part of it, splitting it between a high-yield account and a few CDs maturing at different times keeps some money available while locking a fixed rate on the rest. When rates are expected to fall, a CD protects that part of your savings from cuts; when they are expected to rise, staying in savings lets you benefit straight away. Because nobody knows which way rates will move, many savers simply split the difference.

Key numbers