High-Yield Savings & CD Ladder Calculator

Understanding the High-Yield Savings Calculator

Not all savings accounts are created equal. While traditional savings accounts from brick-and-mortar banks offer minimal returns, High-Yield Savings Accounts (HYSAs) can significantly accelerate the growth of your cash reserves. This calculator is designed to quantify that difference, showing you exactly how much more you could earn by choosing a HYSA.

How It Works

The calculator projects the future value of your savings in two different scenarios: one with a typical HYSA interest rate and one with a lower traditional savings rate. It uses the principle of compound interest to make its projections.

• Initial & Monthly Deposits: The amount you start with and plan to add regularly.
• Years to Save: Your time horizon for saving.
• HYSA & Traditional Rates: The Annual Percentage Yields (APYs) for each account type. The difference between these two rates is the primary driver of the results.

The Calculation

The tool calculates the future balance for both accounts by iteratively adding your monthly contributions and applying the respective monthly compound interest. The key output is the "Extra Earnings," which is the simple difference between the final HYSA balance and the final traditional account balance. This figure represents the money you would be leaving on the table by not using a high-yield account, making a powerful case for optimizing where you store your cash savings.

Frequently Asked Questions