HYSA vs. Brokerage Calculator Methodology

The calculator estimates ending balances, total contributions, expected growth, taxes or drag, fees, goal shortfall or surplus, months to goal, stress-tested brokerage value, liquidity risk, market risk, and a suitability-based comparison.

Each month adds the entered contribution, applies the monthly rate implied by the selected APY, subtracts estimated tax on interest when enabled, subtracts account fees, and clamps the balance to no less than zero.

APY is converted to a monthly rate using a compound-rate formula. Constant APY keeps the starting APY for the full horizon. Falling, rising, and custom ending APY options linearly move from the starting APY to the ending APY over the modeled period.

If interest taxation is enabled, each month's positive HYSA interest is reduced by the entered ordinary income tax rate. This is a simplified planning estimate and does not calculate exact tax liability.

The brokerage path adds monthly contributions, applies a steady expected monthly return, subtracts monthly account fees, and tracks a simplified tax and fee drag. The expected annual return is reduced by the entered expense ratio and tax drag.

Expense ratio and tax drag are treated as annual percentage reductions to the expected return. Monthly account fees are subtracted separately. The model does not simulate individual dividends, realized gains, lots, or tax forms.

When enabled, the calculator applies a one-time brokerage decline in the first year, halfway through the horizon, or at the end of the horizon. After the decline, the remaining months use the entered recovery return assumption. This is not a prediction.

The comparison does not choose only by ending balance. Suitability scores consider time horizon, goal type, access within 12 months, withdrawal flexibility, loss tolerance, cash cushion, and stress-test shortfalls. The result uses “may fit” language rather than telling you what to do.

Goal shortfall is the amount by which the ending balance is below the goal. Goal surplus is the amount above the goal. Months to goal is the first modeled month where the account balance reaches or exceeds the entered goal amount.

This calculator does not include current bank APYs, current brokerage returns, guaranteed investment returns, random market simulations, exact tax liability, FDIC or NCUA eligibility for a specific account, SIPC or brokerage coverage details, investment suitability, investment advice, or professional financial, investment, tax, legal, banking, brokerage, or insurance advice.

This calculator uses user-entered assumptions and simplified steady-return modeling. HYSA rates can change, investment returns are not guaranteed, and taxes, fees, liquidity needs, and market risk can materially change the result.

These calculators are for educational purposes only and are not financial, tax, legal, insurance, investment, real estate, employment, medical, childcare, vehicle-buying, or professional advice.

This calculator is for educational purposes only and is not financial, investment, tax, legal, banking, brokerage, or professional advice.