Having extra money in a savings account can make receiving an unexpected bill less stressful. Even $1,000 saved can be beneficial. If you’re saving up, it’s wise to keep your extra cash in a high-yield savings account so you earn interest. As you earn interest, you can reach your savings goals sooner. Find out how much money you can earn with $1,000 in a high-yield savings account.

Boost your bank account balance as you earn interest

Since most checking accounts don’t earn interest, there’s little benefit to keeping your savings in this kind of bank account. A savings account is a better option. If you have a savings account, review the annual percentage yield (APY). The APY is how much interest you can expect to earn by keeping your money in the bank for a year.

Many traditional banks offer meager APYs. APYs as low as 0.01% are common. But you can boost your earnings by opening a high-yield savings account. Many of the best online banks offer APYs of 4.00% or more. If your savings account doesn’t have a competitive interest rate, you may want to consider opening a new account elsewhere to maximize your earnings.

Ready to boost your savings? To reach your savings goals faster, consider the Discover® Online Savings account, which offers a competitive 4.00% APY — more than eight times the national savings rate. .

How much interest can you earn with $1,000 in savings?

Want to know how much money you can make by keeping $1,000 stashed in a high-yield savings account? You can calculate how much interest you can earn by taking your initial $1,000 deposit amount and multiplying it by the APY. This will show you how much interest you’ll earn if you keep the money in the bank for a year.

Let’s explore why it pays to keep your extra cash in a high-yield savings account instead of a savings account with a meager 0.01% APY. For my calculations, I settled on a 0.01% APY for a standard savings account and a 4.00% rate for a high-yield savings account. The best high-yield savings accounts on our curated list are currently offering APYs ranging from 4.00% APY to 5.15%

The following calculations assume an initial $1,000 deposit with no additional deposits made:

You can earn more by keeping cash in the bank long term

Savings accounts earn compound interest — interest on the interest you’ve already earned! The longer you keep your savings stashed in the bank, the more you can earn. How much can you earn over time with $1,000 in savings? Let’s find out.

The below calculations assume you make no additional contributions beyond your initial $1,000 deposit. However, you can earn even more by making additional deposits.

Here’s a breakdown:

That’s an extra $216.64 earned by keeping your savings in the bank for five years. With almost no effort, you can boost your bank account balance.

Pay attention to APYs

You can maximize the interest you earn by stashing your extra cash in a high-yield savings account with a competitive rate. If you have an existing savings account, check the APY. You may be able to boost your earnings by opening a new account with a different bank. Remember, every dollar you earn from interest adds up and gets you closer to achieving your savings goals.