1. What is Interest Rate Difference?

The interest rate difference calculates how much more (or less) one savings account pays compared to another. This helps savers compare accounts and make informed decisions about where to deposit their money.

2. How Does the Calculator Work?

The calculator uses the simple difference formula:

Where:

• \( Savings\ Rate1 \) — First interest rate (percentage)
• \( Savings\ Rate2 \) — Second interest rate (percentage)

Explanation: The calculation shows the absolute difference between two savings account interest rates.

3. Importance of Rate Comparison

Details: Comparing interest rates helps maximize earnings on savings. Even small differences can significantly impact long-term growth due to compound interest.

4. Using the Calculator

Tips: Enter both interest rates as percentages. The calculator will show which rate is higher and by how much.

5. Frequently Asked Questions (FAQ)

Q1: Why compare savings rates?
A: Higher rates mean more earnings on your deposits. Comparing helps find the best return for your money.

Q2: How much difference does 0.5% make?
A: On $10,000, 0.5% means $50 more per year. Over 10 years with compounding, this difference grows significantly.

Q3: Should I always choose the highest rate?
A: Consider other factors like fees, withdrawal restrictions, and bank stability along with the rate.

Q4: Are online banks better for rates?
A: Often yes, as online banks have lower overhead costs and can offer higher interest rates.

Q5: How often do rates change?
A: Savings rates can change frequently based on central bank policies and market conditions.