Interest Earned Calculator
Last updated July 2, 2026
Last reviewed July 8, 2026
Interest earned in bank and savings accounts has become meaningfully relevant again after a period in which rates hovered near zero. As of 2026, competitive high-yield savings accounts (HYSAs) offered by online banks are paying 4 to 5 percent APY, compared to the national average of approximately 0.45 percent at traditional banks. The difference on a $30,000 emergency fund is approximately $1,050 to $1,500 per year in interest earned at HYSA rates versus $135 at the national average — a gap of $915 to $1,365 per year for keeping the same kind of liquid savings in an account with a higher stated yield. Over five years, that compounding difference exceeds $5,000.
The mechanics of savings account interest are simpler than investment returns: the stated APY already accounts for compounding frequency, so comparing accounts by APY produces an apples-to-apples result regardless of how often each institution compounds. Interest earned in taxable savings accounts is reported as ordinary income in the year earned, regardless of whether it's withdrawn. The IRS threshold for Form 1099-INT reporting is $10 of interest per year — effectively every meaningful savings account holder receives one. For those in the 22 to 24 percent marginal bracket, the after-tax return on a 4.5 percent HYSA is approximately 3.4 to 3.5 percent before inflation and before any future rate changes.
Comparing savings account rates by APY, not by stated rate or compounding frequency. Use the calculator to see what your current balance earns at both rates, then compare that with account minimums, FDIC or NCUA coverage, withdrawal limits, transfer timing, and whether the quoted APY is promotional or variable.