High Interest Savings Accounts Compared and Tips

How Do Savings Interest Rates Work

Every day you have money in your savings account, it earns a little interest. This is what the bank agrees to pay you in exchange for you giving them your money. When you open your savings account, you should shop around for the highest savings account interest rates. Banks usually pay you your total interest earnings once a month. They add all your earnings to your account at the end of every month. Savings interest rates do change over time, so the amount you earn per month can go up and down.

How to calculate how much you’ll earn

Once you know the interest rate on your savings account, it’s a very easy calculation to figure out how much you’ll earn. Just multiply the amount of money in your savings account by the interest rate and divide the result by 100.

Related: Try MyBankTracker Savings Accounts Calculator
For example, if you have $3,000 in your savings account and the interest rate is 0.90 percent, you’ll earn $27 in interest after one year ($3,000 x 0.90/100). If you want to figure out how much you’ll make in a month, you can divide your year’s total by 12. Keep in mind that these numbers are going to be an estimate, as interest rates change over time. However, calculating interest this way should give you a pretty close idea of how much you’ll earn over time.