🏦 Savings Interest Calculator

📖 How to Use

This savings interest calculator helps you quickly calculate deposit interest earnings with both simple and compound interest modes:

Step 1: Choose Calculation Mode

Click "Simple Interest" or "Compound Interest" to switch. Simple interest is calculated only on the principal (common for CDs). Compound interest adds interest to principal for subsequent periods (common for savings accounts and investments).

Step 2: Enter Principal

Enter your deposit amount, e.g., $10,000. Any amount is supported.

Step 3: Set Interest Rate

Enter the annual interest rate as a percentage. High-yield savings accounts currently offer 4-5% APY, while traditional banks offer 0.01-0.5%.

Step 4: Set Term

Enter the deposit term in years. Supports decimals (e.g., 0.5 = 6 months).

Step 5: View Results

Click "Calculate" to instantly see total amount, interest earned, and effective annual yield.

💡 Simple vs Compound Interest

Example: $10,000 principal at 4.5% for 5 years:

• Simple: Interest = $10,000 × 4.5% × 5 = $2,250. Total = $12,250
• Compound (Annual): Total = $10,000 × (1+4.5%)⁵ = $12,461.82. Interest = $2,461.82
• Compound (Monthly): Total = $10,000 × (1+4.5%/12)^60 = $12,519.61. Interest = $2,519.61

The longer the term and higher the rate, the more compound interest outperforms simple interest. Higher compounding frequency (monthly, daily) yields slightly more.

❓ FAQ