Savings Calculator

A high-yield savings account (HYSA) is a savings account that typically earns 10–25x the national average interest rate (0.46% as of 2025). Online banks offer rates of 4–5%+ because they have lower overhead costs. HYSAs are FDIC-insured up to $250,000, making them one of the safest places to grow short-term savings.

Financial advisors typically recommend an emergency fund of 3–6 months of living expenses in liquid savings. Beyond that, savings goals depend on your situation. Common goals include a home down payment (10–20% of purchase price), education, vehicle purchase, and vacation. Once your emergency fund is established, additional savings are often better invested for long-term growth.

For short-term goals (under 2 years), keep money in an FDIC-insured high-yield savings account or money market account. For medium-term goals (2–5 years), consider CDs or Treasury bills. For long-term goals (5+ years), consider investing in diversified index funds, which historically outperform savings accounts significantly over time.

The 50/30/20 budgeting rule suggests allocating 50% of take-home pay to needs, 30% to wants, and 20% to savings and debt repayment. Saving 20% of income is a strong goal, but even saving 5–10% consistently over decades produces significant wealth through compound interest.