Find out how much your savings will grow over time with compound interest. Compare HYSA, CD, and money market account rates — and make sure your money is beating inflation.
Current high-yield savings rates and compound growth examples
Enter your starting balance, monthly contribution, and interest rate to see exactly how your savings will grow year by year.
Open Savings Calculator →Not all savings accounts are equal. Understanding the differences can mean hundreds or even thousands of dollars more in interest each year.
Offered by traditional banks and credit unions, regular savings accounts are safe and accessible but pay very little interest — typically 0.01% to 0.50% APY. They are best for short-term holding of money you need frequent access to. The FDIC insures balances up to $250,000 per depositor, per institution.
Online banks like Marcus by Goldman Sachs, Ally, and SoFi offer HYSAs with rates of 4.5–5.5% APY as of 2024 — 10 to 50 times higher than traditional savings accounts. The catch: these are usually online-only banks with no physical branches. They are FDIC-insured and fully legitimate. For most savers, a HYSA is the obvious upgrade from a regular savings account, especially for emergency funds and medium-term goals.
CDs lock your money for a fixed term (3 months to 5 years) in exchange for a guaranteed interest rate, often slightly higher than a HYSA. The trade-off is liquidity: withdraw early and you'll pay a penalty of 3–6 months of interest. CDs are best for money you are certain you won't need during the term — think a down payment you're saving for 18 months from now.
Money market accounts (MMAs) combine features of savings and checking accounts — higher rates than regular savings (often 4%+) with limited check-writing and debit card privileges. They typically require higher minimum balances ($1,000–$10,000) to earn the top rate. MMAs are excellent for savers who want HYSA-level rates with slightly more transaction flexibility.
Compound interest is interest calculated on both the principal and the accumulated interest from previous periods. The more frequently interest compounds, the faster your money grows. Most HYSAs compound daily, which is the most favorable compounding frequency.
A simple example: $10,000 at 5% APY compounded daily grows to $10,512 after one year. In year two, you earn 5% on $10,512 — not just $10,000. Over five years, that same deposit becomes $12,763. Over 20 years, it becomes $26,533. This is the "snowball effect" of compounding — the longer you save, the faster your money grows.
Adding monthly contributions supercharges this effect. Saving $500 per month at 5% APY for 5 years totals $30,000 in contributions but grows to $34,040. Over 10 years, your $60,000 in contributions becomes $77,641. The compound interest adds $17,641 on top — nearly a year's worth of additional savings for free.
Financial advisors universally recommend building your emergency fund before any other savings goal. The reason: without an emergency fund, any unexpected expense (medical bill, car repair, job loss) forces you into high-interest debt — often credit cards at 20–29% APR. A fully-funded emergency fund of 3–6 months of expenses acts as financial insurance.
The optimal place to keep your emergency fund is a HYSA. Your money earns 4.5–5.5% while remaining instantly accessible. Once your emergency fund is complete, redirect those contributions to investment accounts (401k, Roth IRA) or specific savings goals.
Inflation erodes purchasing power over time. At an average 3% annual inflation rate, $10,000 today buys only $7,441 worth of goods in 10 years. If your savings earn less than the inflation rate, you are actually losing real purchasing power. A HYSA at 5% gives you approximately 2% real return above inflation — your money genuinely grows in terms of what it can buy. Regular savings accounts at 0.10% leave you losing 2.9% of purchasing power every year.
Top high-yield savings accounts as of 2024 include Marcus by Goldman Sachs (no minimum balance, 4.50%+ APY), Ally Bank (no minimum, 4.35%+ APY, ATM card available), SoFi Checking & Savings (4.60%+ APY with direct deposit), American Express High Yield Savings (4.35%+ APY, strong mobile app), and Discover Online Savings Account (4.25%+ APY, excellent customer service). Rates fluctuate with the Federal Reserve's benchmark rate — check each bank's current rate before opening an account.
Regular savings accounts at traditional banks pay 0.01–0.10% APY. HYSAs at online banks pay 4.5–5.5% APY in 2024. Both are FDIC-insured up to $250K. On $10,000, that's $10/year vs. $500/year — a $490 difference with zero additional risk.
You earn interest on your interest. $10,000 at 5% APY (daily compounding) earns $512 in year one, then $539 in year two (on $10,512). Over 10 years it grows to $16,470 with no contributions. Monthly contributions make the effect even more powerful.
Top options: Marcus by Goldman Sachs (4.50%+), SoFi (4.60%+ with direct deposit), Ally Bank (4.35%+), American Express (4.35%+), and Discover (4.25%+). Rates change with Fed policy — always verify the current rate before opening an account.
Always keep your emergency fund in a HYSA, not a CD. Emergency funds need to be instantly accessible. CDs lock your money for months or years with early withdrawal penalties. A HYSA gives you similar rates with full liquidity — the best of both worlds.