Guide to Calculating the Interest Earned in a Savings Account

Share this article:
Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
What Is Interest Earned on Savings?
Simple Interest vs. Compound Interest
Calculating Simple Interest on a Savings Account
A = amount of interest R = rate T = time period P = principal (your account balance)
Calculating Compound Interest on a Savings Account
A = amount of interest R = rate T = time period; in this case, 1 year P = principal (your account balance) N = compounding period (in this case, 12 times a year)
Calculating Interest With a Spreadsheet
Calculating Annual Percentage Yield
R = interest rate N = number of times the interest is compounded per year
Where You Can Find the Interest Rate on Your Savings Accounts
Ways to Earn More Interest With a Savings Account
The Takeaway
Frequently Asked Questions
Photo credit: iStock/s-cphoto
LCBK1222021
About the Author
Susan Guillory is the president of Egg Marketing, a content marketing firm based in San Diego. She’s written several business books, and has been published on sites including Forbes, AllBusiness, and Cision. She enjoys writing about business and personal credit, financial strategies, loans, and credit cards. Follow her on Twitter @eggmarketing.
Share this article: