High-interest savings vs index fund

Quick answer (30 seconds)

High-yield savings vs index fund comes down to certainty vs growth — here’s the simplest way to think about it:

  • High-yield savings is stable and useful for emergency funds and short horizons.
  • Index funds/ETFs have higher expected growth long-term, but can fall sharply in bad years.
  • Use the calculator to compare your timeline, rate assumptions, and contribution plan.

Savings is stable. Index funds can grow faster over the long run but can fall short-term. Use the calculator to compare scenarios.

Compare both outcomes

When savings wins

When index funds often win

Model the gap

Try a realistic savings rate and a conservative index-fund return assumption. The long-term difference may be larger than you expect.

Related calculators & examples

Keep exploring — these pages connect directly to calculators so you can run your own numbers.

FAQ

Are index funds guaranteed?

No. Returns vary and markets can drop significantly.

Are savings accounts risk-free?

They’re generally lower risk, but interest rates change and inflation can reduce real returns.

What about fees?

Index funds have fees (often small). Fees still compound over time.

How long is “long-term”?

Often 10+ years, but it depends on your goal and risk tolerance.

How do I compare properly?

Use the same timeline and contributions in /ETFvSavings.html and compare outcomes.

Related links

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