Calculator Methodology

HYSA calculator formula

The HYSA calculator uses monthly compounding with an additional regular contribution each month:

This simulates how most HYSAs actually work: interest is calculated daily, accrued throughout the month, and credited at month end. Using monthly compounding gives results within 0.05% of daily compounding for typical APYs.

Compound interest formula

• A = final amount
• P = principal
• r = annual rate (decimal)
• n = compounding periods per year
• t = years

APY vs APR

APY (Annual Percentage Yield) includes the effect of compounding. APR (Annual Percentage Rate) does not. All inputs on this site use APY, which is what banks advertise for savings accounts.

APY = (1 + APR/n)^n - 1, where n is the number of compounding periods per year. For a 5.00% APR compounded daily, the APY is 5.127%.

Compounding assumption

All calculators on this site assume monthly compounding with the monthly contribution added at the end of each month. This is within 0.05% of the daily compounding most HYSAs actually use. For long horizons (20+ years), the difference is small enough to ignore.

The CD calculator assumes the deposit stays in for the full term with no early withdrawal. Real CDs charge a penalty if you pull out early (usually 3 to 12 months of interest).

Tax treatment

Calculators on this site show gross interest earned. They do not subtract taxes. Interest from a HYSA or CD counts as ordinary income on your federal tax return. Most taxpayers owe 12% to 24% on this income.

State tax rules vary. Some states (Florida, Texas, Nevada, and others) do not tax interest. Some (California, New York) tax it at the state income tax rate.

The bank sends a 1099-INT each January if you earned $10 or more in interest. Source: IRS Publication 550: Investment Income and Expenses.

FDIC insurance

All accounts ranked on the Best HYSAs page are FDIC insured up to $250,000 per depositor, per insured bank, per ownership category. Joint accounts get up to $500,000.

FDIC insurance is backed by the U.S. government. No depositor has lost FDIC-insured funds since the FDIC began in 1933. Source: FDIC Deposit Insurance Overview.

Rate data sources

Rates on the Best HYSAs page come from each bank's official rate page, pulled on the date listed at the top of that page. National averages come from FDIC National Rates and Rate Caps, published weekly. Federal funds rate data comes from the Federal Reserve.

We do not guarantee current accuracy. Always verify the rate directly with the bank before opening an account. Rates are variable and can change without notice.

Disclaimer

HYSACalc.com is for informational purposes only. Nothing on this site is financial advice. Consult a licensed financial advisor before making savings decisions.