Savings Calculator

How Does a Savings Account Work?

Savings accounts provide a safe space for your money. Unlike investment accounts, you can easily deposit extra money and take it out when you need it. 

You start with an initial deposit. The bank pays you an interest rate on your balance over time, typically calculated based on the average daily balance maintained in the account. As your money sits in the account, your savings passively increase.

In the unlikely event of a bank failure, the Federal Deposit Insurance Corporation (FDIC) insures you up to $250,000 per account

How to Start Growing Your Savings

Building a secure financial future starts with a solid savings plan. This can include cutting back on spending, opening a savings account or investing in a CD.

Here are some impactful savings platforms you can take advantage of.

Savings Account

Savings accounts offer a safe and accessible place to keep your extra funds. Even small, regular deposits add up significantly over time.

They're ideal for building an emergency fund since the process of building one doesn't require a large cash deposit upfront.

They are also optimum for saving for short or medium-term goals, such as a vacation or a down payment on a car.

Certificate of Deposits (CDs)

Unlike other savings methods, CDs offer a chance to potentially grow your money faster with fixed, higher interest rates for short or longer-term periods.

However, your money is locked away for the term length you choose, which can range from a few months to multiple years.

Early withdrawals can incur a penalty. Therefore, CDs are best suited for financial goals you know you won't need to reach immediately.

Money Market Accounts

Money market accounts are essentially savings accounts that pay slightly higher interest rates while allowing you to make a few transactions each month.

It bridges the gap between a traditional savings account and a checking account, offering additional interest on your balance over traditional savings accounts and access to your funds when needed.

By utilizing the Savings Growth Calculator, you can compare options and determine the best fit for your savings plan. The key is to start saving today.

How Do I Calculate Interest on a Savings Account?

Savings account interest is typically calculated based on a method known as the daily balance method. The daily balance method calculation factors are broken down as follows:

• Tracking Your Balance: Each day, the bank tracks your account balance.
• Calculating the Average: For each day in the interest-earning period, the bank multiplies your daily balance by the daily interest rate (in decimal format). This daily interest amount is calculated independently for each day.
• Interest Rate Application: At the end of the interest-earning period, the bank adds up all the daily interest amounts to get the total interest earned for that period.
• Adding Interest: Finally, the bank adds the total interest earned to your account balance. This increases your account balance and becomes part of the calculation for the next interest-earning period.
  
  

Savings account interest calculation also depends on how frequently your bank calculates interest. Interest can be calculated daily, monthly or quarterly.

The more frequently the calculation is made, the more often you will be paid interest payments. With Seacoast's Sail Into Savings account, you will receive automatic interest payments directly into your checking account.