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One of the best ways to grow your wealth is to take advantage of a high-yield savings account and make money from the interest. Depending on your age, the average savings in America can vary, but those who start younger can build more wealth because they have more time.
Use our free simple savings account calculator to see how your money can make money over time from interest payments.
Simple Savings Calculator
Breakdown of Savings
Simple Savings Account Calculator Help
The simple savings account calculator helps you easily calculate the annual percentage yield (APY) and accurately show how your investment can grow. Below, we go over each aspect of the calculator and how it works.
- Starting deposit: When you open a savings account, this is your initial deposit. This first deposit plays a big role in how much your wealth will grow over time.
- Monthly contribution amount: It’s beneficial to continue depositing into your savings account monthly. Adjust this amount in the savings account calculator to see how much your money can grow and benefit from compound interest.
- Number of years: Giving your money time to grow is the ideal strategy due to compound interest.
- Annual interest rate: Interest rates can vary depending on the bank and type of account. You can use certificates of deposit (CDs), a high-yield savings account, or money market accounts. Be sure to shop around to find the best interest rates before you decide.
How Much Should You Save Each Month?
How much you save each month is unique to your financial situation. However much you choose to deposit into your savings account, the important thing is to be consistent. One way to do this is by setting up automatic transfers from your checking to your savings each month after a payday.
You’ll also want to ensure you’re budgeting properly so you don’t fall behind on other expenses like bills or debt payments. A monthly budget template can help you create a strategy and see what amount works for you.
How Do You Calculate APY?
To calculate the simple interest amount in a savings account, multiply the account balance by the annual percentage rate. For example, if you save $10,000 in a year and have a high-yield savings account with a 4% interest rate, the calculation is:
$10,000 x 0.04 = $400
How Savings Can Improve Your Financial Well-Being
Having a savings account is not only helpful for building your wealth, but it also provides you with some security in an emergency. By finding a savings account with a high interest rate, you will make money by simply storing your savings in the account.
Improving your credit score can also help your financial well-being. A good credit score lets you benefit from lower interest fees and access to additional loans and lines of credit. If you want to know where you stand with your credit, sign up for your free credit report card. You can also utilize Credit.com’s ExtraCredit® service to get credit monitoring alerts, additional credit reporting, and more.
Helpful Links to Start Saving
Check out some of our other articles for more tips and strategies for saving and growing your wealth.
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