High Yield Savings Account Calculator

Welcome to the High Yield Savings Account Calculator! This tool helps you estimate how much your savings can grow over time when placed in a high yield savings account. By entering details like your initial deposit, monthly contributions, interest rate, and time frame, you can instantly see the future value of your account, the total contributions made, and the interest earned.

If you’re ready to calculate, simply plug in your numbers. Or, continue reading to learn about the formulas, parameter explanations, and a step-by-step example to help you understand your results.

Understanding the Formula

The High Yield Savings Account Calculator uses three main formulas to provide a complete picture of your savings growth.

1. Future Value with Regular Contributions
This formula estimates how much money you’ll have at the end of the saving period. It combines your starting balance, your monthly or yearly contributions, and the compound interest earned.

Formula:
A = P(1 + r/n)^(nt) + PMT * [(((1 + r/n)^(nt) - 1) / (r/n))]

• A: The future value of the account (final balance).
• P: The starting balance.
• r: The annual interest rate in decimal form.
• n: The number of compounding periods per year.
• t: The total number of years.
• PMT: The regular contribution (e.g., monthly deposit).

2. Total Contributions
This shows how much of the balance comes directly from your deposits.

Formula:
Total Contributions = P + (PMT * C * t)

• Total Contributions: Total amount you deposited.
• P: The starting balance.
• PMT: Regular contribution.
• C: Number of contributions per year.
• t: Years of contribution.

3. Total Interest Earned
This reveals how much your bank pays you in interest, which is the extra money earned on top of your contributions.

Formula:
Total Interest Earned = A - Total Contributions

• Total Interest Earned: Interest growth.
• A: Final balance.
• Total Contributions: Your deposits.

In short, these formulas help you see three perspectives: what you end up with, what you personally put in, and how much your savings earned for you.

Parameters Explained

P (Principal): Your starting amount in the account. The larger the initial deposit, the faster it grows.

r (Interest Rate): The annual percentage yield (APY). Higher rates mean faster growth.

n (Compounding Frequency): How often interest is applied. Monthly and daily compounding usually generate more interest than yearly.

t (Time): The length of time your money remains in the account, measured in years. The longer the savings stay, the greater the compounding effect.

PMT (Regular Contributions): Any additional money you add regularly, like monthly deposits.

C (Contribution Frequency): The number of times you contribute each year, usually 12 for monthly.

A (Future Value): The final balance after adding deposits and interest.

How to Use the High Yield Savings Account Calculator — Step-by-Step Example

Let’s walk through an example.

• Initial deposit (P): $2,000
• Monthly deposit (PMT): $200
• Annual interest rate (r): 4% (0.04 in decimal)
• Compounding frequency (n): 12 (monthly)
• Time (t): 5 years
• Contribution frequency (C): 12

Step 1: Calculate Future Value (A)
A = 2000(1 + 0.04/12)^(12×5) + 200 × [((1 + 0.04/12)^(12×5) - 1) / (0.04/12)]
A ≈ $14,605.

Step 2: Calculate Total Contributions
Total Contributions = 2000 + (200 × 12 × 5)
= $14,000.

Step 3: Calculate Total Interest Earned
Total Interest Earned = 14,605 – 14,000
= $605.

Result: After 5 years, your savings will grow to $14,605, where $605 comes purely from interest.

Additional Information

Here’s a quick reference table showing how compounding frequency affects interest growth on a $5,000 deposit at 4% APY over 10 years (no contributions):

Compounding Frequency	Final Balance ($)	Interest Earned ($)
Annually	7,401	2,401
Quarterly	7,426	2,426
Monthly	7,438	2,438
Daily	7,445	2,445

FAQs