High-Yield Savings Calculator: Interest, Monthly Deposits and Tax
See what a high-yield savings account earns from an APY, with monthly deposits, interest after tax, and how much more it pays than a lower-rate account
By the Monthly Income Booster editorial team · Updated · How we research and fact-check
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High-Yield Savings Calculator: Interest, Monthly Deposits and Tax
Printed 2026-10-27 from billorganizingapp.com/income/calculators/high-yield-savings/ — an estimate for planning, not financial or tax advice.
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Enter an opening deposit, what you add each month, the account's APY and how many years you will save. The calculator shows the balance, the interest earned before and after tax, the first month's interest, and the difference against a second rate, such as your current bank's. Rates on savings accounts are variable and change over time, so use the rate the bank quotes today and rerun it when the rate moves. The rates in the examples are illustrations, not offers.
How APY works
APY (annual percentage yield) is defined by the Truth in Savings Act's Regulation DD as the interest a balance earns in a year including compounding. That means one year on a steady balance earns exactly the APY, whether the bank compounds daily or monthly. The calculator converts APY to an equivalent monthly rate, i = (1 + APY)^(1/12) − 1, and adds deposits at the end of each month: balance = deposit × (1 + i)^n + monthly deposit × ((1 + i)^n − 1) ÷ i.
A worked example
$10,000 at 4% APY for one year becomes $10,400, $400 of interest, about $33 in the first month. Add $200 a month for five years and the balance reaches $25,402: you put in $22,000 and earn $3,402 in interest, or $2,654 after tax at a 22% rate. At 0.5% APY the same saving would earn $401, $3,001 less.
| APY | Balance after 5 years | Interest earned |
|---|---|---|
| 0.5% | $22,401 | $401 |
| 2% | $23,645 | $1,645 |
| 3% | $24,509 | $2,509 |
| 4% | $25,402 | $3,402 |
| 5% | $26,326 | $4,326 |
Tax on savings interest
In the US, interest from a savings account is taxable as ordinary income in the year it is credited, even if you leave it in the account (IRS Topic 403). Banks send Form 1099-INT when interest reaches $10 or more, but it is taxable either way. Enter your own marginal rate to see what you keep; add your state rate if your state taxes interest.
Before you move your savings
Check that the bank is FDIC-insured (or NCUA-insured for credit unions): deposits are covered up to $250,000 per depositor, per insured bank, per ownership category. Look for minimum balances, monthly fees and limits on withdrawals, and note that an introductory rate may drop later. A high-yield savings account suits an emergency fund and money you need within a few years; it will usually not keep up with long-term investing, and a rate can fall at any time.
Locking in a rate
A CD fixes the rate for a term in exchange for an early-withdrawal penalty; compare its interest with the FDIC national averages.
Official sources
Tax rules, limits and pay data change. Check the current figures with the primary source before acting on them.
Frequently Asked Questions
How much interest will $10,000 earn in a high-yield savings account?+
At 4% APY, $400 in a year, about $33 a month, as long as the rate stays the same. At 5% APY it would be $500. APY already includes compounding, so a year's interest is simply balance × APY.
How is savings interest calculated monthly?+
Convert APY to a monthly rate with (1 + APY)^(1/12) − 1 and multiply by the balance. At 4% APY that is about 0.327% a month. Dividing APY by 12 slightly overstates it, because APY already includes compounding.
What is the difference between APY and APR/interest rate?+
The interest rate is the rate before compounding; APY includes the effect of compounding over a year. Regulation DD requires banks to quote APY on deposit accounts so you can compare them on the same basis.
Is high-yield savings interest taxable?+
Yes, in the US it is taxed as ordinary income in the year it is credited (IRS Topic 403). The calculator's tax field shows the after-tax amount at the rate you enter.
Is my money safe in a high-yield savings account?+
At an FDIC-insured bank, deposits are insured up to $250,000 per depositor, per bank, per ownership category. Check the bank on the FDIC's BankFind tool, especially with online or fintech accounts that hold money through partner banks.
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