Why the account you choose matters
Interest rates on savings accounts vary enormously between banks. Online banks and credit unions often pay several times more than the large branch banks, whose standard savings accounts have long paid well under 1%. The FDIC publishes a national average savings rate that has typically sat well below 1%, while competitive high-yield accounts have paid around 4% at times when central bank rates are high.
On a $15,000 emergency fund, the difference between 0.4% and 4% is about $540 a year, for doing nothing more than moving the money. The calculator converts each APY into a monthly rate and adds your deposits so you can see the gap grow.
What to check before switching
Make sure the account is insured: in the US, look for FDIC insurance at banks or NCUA insurance at credit unions, which cover up to $250,000 per depositor, per institution, per ownership category. Check for monthly fees, minimum balances and how quickly transfers reach your checking account. High-yield rates are variable and fall when central banks cut rates, so revisit your choice once a year.
Common questions
How much interest will I earn on $10,000 in a high-yield savings account?
At 4% APY, about $400 in the first year. At 0.4% it would be $40.
Are high-yield savings accounts safe?
Yes, if the bank is FDIC-insured or the credit union is NCUA-insured, up to the coverage limits.
Is savings interest taxed?
In the US, yes, as ordinary income in the year it is earned.
This calculator gives estimates for planning. Real returns, rates and prices change, so treat the result as a guide rather than a promise. Read how we build and check our calculators.