Savings account interest can be estimated with simple- or compound-interest calculations based on the balance, rate and time. At 3.5% APY compounded daily, a $5,000 deposit would grow to $5,178.09 after one year, including $178.09 in interest.
Simple interest is based on the starting principal, annual rate and time in the account. With compound interest, earned interest is added to the balance at intervals and can earn interest in turn; the guide says many savings accounts compound daily. An online savings calculator can also estimate returns from account details.
To seek a higher rate, the article recommends comparing high-yield accounts and checking for tiered rates or balance caps; it says some high-yield accounts currently offer 4% APY or more. CDs can lock in yields, typically for one to five years, but withdrawing before the term ends usually incurs a penalty.
