How to Calculate Interest Earned on a Savings Account

Use this simple technique to calculate the interest that you can earn on the money deposited in your savings account.

Step 1

To begin, identify the current interest rate (rate of return) that your financial institution pays on the balance in your savings account. This can usually be found on your savings account statement, or the bank's website. Typical rates on savings accounts are low since the money is usually FDIC insured and is at little risk. For our example let's use an interest rate of 1.5 percent per year for your account. You will then need to convert this percentage amount into a decimal format to make the calculation easier. For example:


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1.5 percent = .015 (add a zero as a placeholder for the tens place and move the decimal point two places to the left).

Step 2

Next, determine the amount of your savings. For this example, let's assume you have $10,000 in your savings account. Now, that we have the two pieces of information that we need for our calculation, we will see what it looks like.


$10,000 x .015 = $150 in interest earned on your savings account balance per year.

Step 3

Finally, you can further refine these calculations to determine how much interest you earn on your savings each month, each week, and even each day. Here are a few examples:



$150 (interest earned over one year on $10,000) divided by 12 (months in a year) = $12.50 per month in interest earned on this balance.

$150 (interest earned over one year on $10,000) divided by 52 (weeks in a year) = $2.88 per week in interest earned on this balance.

$150 (interest earned over one year on $10,000) divided by 365 (days in a year) = $0.41 per day in interest earned on this balance.


As you can see, the low interest rate available on a savings account does little to compensate you for investing your money for a long period of time. Therefore, you must seek investment vehicles with a higher total return, such as certificates of deposit, bonds, or equities, to earn a decent rate of return above inflation.

Things You'll Need

  • Savings account statement

  • Calculator


These calculations do not account for the compounding of interest over time. However, they give you a general idea of the returns in dollar terms of your money held in a savings account. There is a small percentage of "rounding error" in these calculations, however these errors are insignificant for most savers.



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