Free HYSA calculator from Fynvorax. Compare savings APY to inflation and taxes to see your real purchasing power over time.
Even 4.5% HYSA loses purchasing power if inflation is 3.5% — real return ≈ 1%. Tax on interest shrinks it further. See after-tax real yield vs CPI.
Most global tax authorities treat interest from savings accounts, CDs, and liquid wrappers as standard ordinary taxable income, meaning it gets billed at your highest marginal income tax bracket (up to 37%). On the other hand, traditional stocks held for over a year are classified under long-term capital gains tax codes (usually capped at 15% or 20%), making stock gains structurally more tax-efficient than cash equivalents.
The official Consumer Price Index (CPI) tracks a balanced composite basket of average household goods. However, custom real-world items like quality health insurance, high-end housing, energy, and college tuitions historically climb at rates double that basket. Your personal lifestyle inflation can significantly exceed official numbers, meaning cash erosion might be broader than calculated here.
Most countries tax bank interest like wages, not at lower capital gains rates — use tax-advantaged accounts when available.
When nominal APY exceeds inflation plus your marginal tax rate on interest: roughly APY > inflation / (1 − tax rate) for a quick check.