HYSA Interest Calculator
Calculate exactly how much interest you will earn in a high-yield savings account (HYSA) with daily compounding and optional monthly deposits. Compare APY rates and see the difference between a 0.05% big-bank account and a 4-5% online HYSA.
What Is a High-Yield Savings Account?
A high-yield savings account (HYSA) is an FDIC-insured savings account that pays significantly more interest than a traditional big-bank savings account. Where the national average savings rate is often around 0.4-0.6% APY, online banks and credit unions commonly pay 4-5% APY on liquid, no-minimum HYSAs. Interest is typically compounded daily and paid monthly. This calculator takes your starting balance, APY, time horizon, and monthly contributions, then projects your ending balance and total interest earned — so you can quantify the cost of leaving money in a low-rate account.
How HYSA Interest Is Calculated
Most HYSAs compound interest daily using the formula A = P(1 + r/n)^(nt), where P is principal, r is the annual rate as a decimal, n is compounding periods per year (365 for daily), and t is time in years. On a $10,000 balance at 4.5% APY with daily compounding, you earn roughly $460 in the first year — compared with about $5 in a 0.05% big-bank account. Adding monthly deposits multiplies the effect because each new deposit starts earning interest immediately on a compounding base.
APY vs APR — Why the Difference Matters
HYSAs advertise APY (annual percentage yield), which already factors in compounding. APR (annual percentage rate) is the simple interest rate before compounding. A 4.4% APR with daily compounding produces about 4.5% APY. When comparing accounts, always compare APY to APY — not APY to APR — or the higher-compounding account will appear worse than it is. This calculator asks for APY and does the daily-compound math internally, so your projection reflects what you will actually see at year-end.
HYSA vs CD vs Money Market
A HYSA keeps money fully liquid with no withdrawal penalty, which makes it ideal for emergency funds and short-term savings goals. A certificate of deposit (CD) locks money in for a fixed term (3 months to 5 years) in exchange for a slightly higher rate — but early withdrawal forfeits several months of interest. Money market accounts (MMAs) are similar to HYSAs but often include check-writing and debit access. For most savers, a HYSA is the right default because the rate gap versus CDs is usually small and flexibility is worth preserving.
HYSA Interest Calculator: 2026 Rate Benchmarks
In June 2026, top FDIC-insured online HYSAs are paying roughly 4.00%–4.60% APY, tracking the current federal funds target range. The national average savings rate sits near 0.59%, which means a $25,000 balance earning the average rate produces about $148/year — versus about $1,138/year at 4.55%. The FDIC publishes the official national rate cap weekly at FDIC National Rates and Rate Caps — check it before you accept any bank's pitch on "above-average" rates. Updated 2026-06-19.
HYSA Tax Treatment and the $10 1099-INT Threshold
Every dollar of HYSA interest is taxable as ordinary income in the year it is credited — even if you never withdraw it. Banks issue a Form 1099-INT for any account that pays $10 or more in interest during the calendar year (smaller amounts are still taxable, just not reported). Per IRS Form 1099-INT guidance, the interest reports on Schedule B if your total interest exceeds $1,500, and gets added to your federal AGI taxed at your marginal bracket (currently 10–37%). State tax also applies in most states except Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. Run this HYSA interest calculator to project the gross amount, then multiply by your marginal rate to estimate the net-of-tax return.
Best HYSA Rates by Bank (June 2026 Snapshot)
Run the calculator against the leading FDIC-insured online HYSA APYs as of June 2026. Rates compiled from each bank's published rate page and cross-checked against the FDIC National Rates and Rate Caps weekly file:
- Varo Bank Savings: 5.00% APY (up to $5K balance, 3.00% above) — FDIC #59017
- Western Alliance Savings (via Raisin): 4.60% APY — FDIC #57512
- BMO Alto: 4.50% APY — FDIC #16571
- Marcus by Goldman Sachs: 4.30% APY — FDIC #33124
- Ally Bank Online Savings: 4.20% APY — FDIC #57803
- Discover Online Savings: 4.20% APY — FDIC #5649
- SoFi Checking + Savings: 4.20% APY (with direct deposit) — FDIC #4116
- Capital One 360 Performance Savings: 4.10% APY — FDIC #4297
Always click through to the bank's own page to verify the rate before opening — APYs reprice within 2–4 weeks of any Fed-funds move and intro promos sometimes vanish without notice. The FDIC national savings average sits at 0.59%, so even the lowest entry above is 7x the national mean. Updated 2026-07-03.
What You Actually Keep: HYSA Interest After Tax
High-yield savings interest is ordinary income, not a capital gain, so it is taxed at your marginal federal rate in the year it is credited — not when you withdraw it. Your bank issues a Form 1099-INT once you earn $10 or more, and the IRS receives the same copy, so the interest is matched against your return automatically. Pick your bracket in the calculator above and it shows the tax, the interest you keep, and the after-tax effective APY. The gap is larger than most savers expect: $10,000 at 4.5% APY for five years earns $2,461.82 in interest, but in the 24% bracket $590.84 goes to federal tax and you keep $1,870.98 — an after-tax yield of 3.42%, not 4.5%. In the 37% bracket the same account yields 2.84% after tax. State income tax, where it applies, comes off on top of that, which is why savers in no-income-tax states keep noticeably more from the identical account. Interest reporting rules are set out in IRS Topic No. 403, Interest Received. Updated 2026-08-18.
HYSA Real Return: APY Minus Inflation (2026)
The APY on this HYSA interest calculator is your nominal return — the sticker rate before inflation eats purchasing power. Your real return is APY minus CPI inflation. Per the BLS Consumer Price Index (June 2026 release), headline CPI is running at 3.0% year-over-year (all items, all urban consumers, seasonally adjusted). A 4.50% HYSA therefore delivers a +1.50% real return — the first meaningfully positive real HYSA return since 2020. Compare with 2022, when top HYSAs paid 3.0% APY against 9.1% CPI — a –6.1% real loss. This is why the "stuff cash in a big-bank savings account at 0.59%" default silently drains buying power: at current 3.0% CPI it is a –2.4% real return. Run the calculator, then subtract the current 12-month CPI from your APY to see whether the account is actually protecting your purchasing power.
HYSA Interest Calculator: FDIC Insurance, Rate Ceilings, and 2026 Fed Policy
The HYSA interest calculator above is only as good as the rate you enter — and rates in 2026 are shaped directly by Federal Reserve FOMC decisions. The current federal funds target range sits at 4.25%–4.50% after two 25bp cuts in early 2026, and top online HYSAs track this range within 25–50 basis points. Every deposit up to $250,000 per depositor per FDIC-insured bank per ownership category is protected — verify your bank on FDIC BankFind before opening. Beware "HYSA-like" accounts at neobanks that are NOT direct FDIC members; they route deposits to a network of partner banks, which may not aggregate coverage the way you expect. When the Fed cuts rates again (markets price two more 25bp cuts by year-end 2026), rerun this calculator with the new APY — a 0.50% cut on a $50,000 balance costs you $250/year in interest.
Last updated 2026-07-15.
Frequently Asked Questions
Do I pay tax on high-yield savings account interest?
Yes. HYSA interest is ordinary income taxed at your marginal federal rate in the year it is credited, not when you withdraw it. Your bank sends a Form 1099-INT once you earn $10 or more and files a copy with the IRS. State income tax may apply on top. Pick your bracket in the calculator above to see the tax, the interest you keep, and the after-tax yield.
What is my after-tax yield on a 4.5% APY savings account?
Multiply the APY by (1 minus your marginal rate). At 4.5% APY that is 3.42% in the 24% bracket, 3.06% in the 32% bracket, and 2.84% in the 37% bracket. In dollar terms, $10,000 held for five years at 4.5% earns $2,461.82 of interest, of which $590.84 goes to federal tax in the 24% bracket. State tax, where it applies, reduces the yield further.
How accurate is this HYSA interest calculator?
It grows the balance by exactly the APY you enter, stepping month by month so monthly deposits are credited the way a real account credits them. APY already has compounding baked into it, so the calculator does not compound the APY again daily — doing that would turn a 4.5% APY into about 4.6% and overstate every result. Your ending balance should match a real HYSA statement within rounding, provided the APY stays constant for the full horizon; real-world APYs are variable.
When should I rerun the HYSA interest calculator?
Rerun any time the Fed changes the federal funds rate, since HYSA APYs reprice within weeks of a Fed move. Also rerun when you change your monthly contribution or your time horizon — both compound aggressively over multi-year windows.
What is the difference between a HYSA and a regular savings account?
A high-yield savings account pays 8-10x more interest than a typical big-bank savings account. National average savings rates hover around 0.4-0.6% APY, while online HYSAs commonly pay 4-5% APY. Both are FDIC-insured up to $250,000 per depositor. The difference is purely rate — the money is equally safe.
Is HYSA interest taxable?
Yes. Interest earned in a standard HYSA is taxed as ordinary income at your marginal federal tax rate, plus state tax where applicable. Your bank will send a 1099-INT if you earn $10 or more in interest. To shelter interest from tax, you would need a Roth IRA, HSA, or 529 — not a HYSA.
How often does HYSA interest compound?
Most HYSAs compound interest daily and credit it to your account monthly. Daily compounding means each day you earn interest on your previous balance plus yesterday's interest. The difference between daily and monthly compounding at the same APY is small (a few dollars a year) because APY already reflects compounding.
Is money in a HYSA safe?
Yes, if the account is with an FDIC-insured bank or NCUA-insured credit union. Both cover up to $250,000 per depositor per institution per ownership category. For balances above $250,000, spread funds across multiple insured institutions or account categories to maintain full coverage.
Can HYSA rates change?
Yes. HYSA APYs are variable and typically track the federal funds rate. When the Fed raises rates, HYSA rates usually rise within weeks. When the Fed cuts, HYSA rates fall. If rate stability matters, a CD locks in a fixed rate for its term but sacrifices liquidity.
How much should I keep in a HYSA?
Most planners recommend 3-6 months of essential expenses as an emergency fund in a HYSA. Short-term savings goals (house down payment, car, wedding) within 1-3 years also fit well in a HYSA. Money needed in 5+ years generally belongs in invested accounts because stocks outpace HYSAs over long horizons.
How much tax do I pay on HYSA interest in 2026?
HYSA interest is taxed as ordinary income at your marginal federal rate (10%, 12%, 22%, 24%, 32%, 35%, or 37% for tax year 2026). Most states also tax it — exceptions are AK, FL, NV, SD, TN, TX, WA, and WY. Example: $1,138 of HYSA interest at the 22% federal bracket plus 5% state = $307 owed. Banks send Form 1099-INT for amounts ≥$10. Source: IRS Form 1099-INT.
Should I open a HYSA inside a Roth IRA to skip the interest tax?
You can hold cash/HYSA-equivalent balances inside a Roth IRA, but the contribution is capped at $7,000/year ($8,000 if 50+) in 2026 and the funds are locked until 59½ for tax-free withdrawal. For your emergency fund or short-term goals, a taxable HYSA is better — full liquidity, no penalty. Use the Roth shelter for long-horizon investments (stocks/index funds) where the tax-free compounding has more years to work.
Which bank has the best HYSA rate in June 2026?
As of June 2026, Varo Bank leads at 5.00% APY (capped to $5K, 3.00% above). Among uncapped rates, Western Alliance via Raisin (4.60%), BMO Alto (4.50%), and Marcus by Goldman Sachs (4.30%) top the list. All are FDIC-insured to $250K. APYs reprice within 2-4 weeks of any Fed-funds move — verify the rate on the bank's own page before opening, since intro promos can vanish without notice.
How quickly do HYSA rates change after a Fed rate move?
Online HYSAs reprice 2-4 weeks after the Fed adjusts the federal funds target range. Brick-and-mortar bank savings rates lag much longer (often months or never) — which is why the FDIC national savings average is stuck near 0.59% even when top online HYSAs pay 4-5%. Set a calendar reminder to rerun this HYSA interest calculator at the next FOMC meeting; you may need to switch banks to hold your APY.
What is my real HYSA return after inflation in 2026?
Subtract the current 12-month CPI from your APY. As of the June 2026 BLS release, headline CPI is 3.0% year-over-year. A 4.50% HYSA therefore delivers +1.50% real return — actually growing purchasing power. The FDIC national average (0.59%) delivers a –2.4% real return. Rerun this HYSA interest calculator with your real APY (nominal minus CPI) to see growth in today's dollars.
How does inflation affect HYSA interest earned?
Inflation erodes the purchasing power of every dollar of HYSA interest. A $1,000 balance earning 4.5% APY grows to $1,045 nominal, but at 3.0% CPI the same $1,045 buys only $1,015 worth of 2026 goods — the other $30 of "gain" was inflation-eaten. This is why the safest use of a HYSA is short-horizon money (emergency fund, 1-3 year goals). For 5+ year money, invested accounts (index funds, I-Bonds) historically outpace inflation more reliably than any HYSA.
HYSA interest calculator: how do I use it to project earnings?
Enter four numbers: (1) starting balance, (2) APY from your bank (currently 4.00%–4.60% at top online HYSAs in mid-2026), (3) time horizon in years, and (4) any monthly deposit. The HYSA interest calculator applies daily compounding with the formula A = P(1 + r/365)^(365t), then layers monthly deposits, and returns ending balance, total interest earned, and how much more you make versus a 0.05% big-bank account. Use it to A/B test a switch: compare your current bank's APY vs a top online HYSA over 5 years — the difference is usually thousands.
Are HYSA rates guaranteed for the term I entered in the calculator?
No. HYSA APYs are variable and reprice within 2-4 weeks of any Federal Reserve federal funds target move. The projection this HYSA interest calculator returns assumes a constant APY for the full horizon, which never happens in reality. If the Fed cuts by 50bp mid-year, your effective earned interest will be lower than shown. Best practice: rerun after every FOMC meeting (8 per year) with the updated bank APY. For rate lock, use a CD calculator instead — CDs fix the rate for the whole term in exchange for early-withdrawal penalties.