Interest Income Calculator (Monthly Interest on Savings)
How much interest does your money earn per month? See the monthly, daily and yearly interest on a deposit after tax, how much you can spend while keeping up with inflation, and the deposit needed for a target income.
How it works
Monthly interest = deposit × annual rate ÷ 12 · after tax = × (1 − tax) · daily interest = deposit × rate ÷ 365 · inflation offset = deposit × inflation ÷ 12 · real return = (1 + rate × (1 − tax)) ÷ (1 + inflation) − 1 · deposit needed = monthly income × 12 ÷ (rate × (1 − tax))
If interest is paid out monthly instead of reinvested, a deposit earns its annual rate divided by twelve every month. Two adjustments make the number meaningful: tax on interest, and inflation — part of each interest payment only replaces the purchasing power the deposit loses each year. Spending only the part above inflation keeps your capital intact in real terms, which is why “living off interest” needs a much larger deposit than the simple formula suggests.
Worked example
A deposit of 100,000 at 5% a year pays 100,000 × 0.05 ÷ 12 = 416.67 a month before tax — 5,000 a year, or 13.70 a day. With 3% inflation, 250.00 a month must stay in the account to keep its purchasing power, so you can spend 166.67 a month; the real return is 1.05 ÷ 1.03 − 1 = 1.94%. To receive 1,000 a month you would need 1,000 × 12 ÷ 0.05 = 240,000, or 600,000 to also keep up with inflation.
Sources: FDIC — National rates and rate caps · Investor.gov — Compound interest calculator
Frequently asked questions
How much interest does 100,000 earn per month?
At 5% a year it earns 100,000 × 0.05 ÷ 12 = 416.67 a month before tax, or about 13.70 a day. At 3% it would be 250.00 a month.
Is the rate an APY or a nominal rate?
This calculator treats the rate as a nominal annual rate paid out monthly (simple interest that you withdraw). If interest is left in the account it compounds, and the yearly yield (APY) is slightly higher.
How much money do I need to live off interest?
Divide the yearly income you want by the after-tax interest rate. For 1,000 a month at 5% with no tax you need 240,000 — and about 600,000 if you also want to reinvest enough to keep up with 3% inflation.
Why include inflation?
Because spending all the interest leaves the deposit’s nominal value unchanged while prices rise, so your capital and future income buy less every year. The real return shows what you actually gain in purchasing power.
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Educational estimate, not financial advice. Real contracts, fees, taxes, day-count and rounding rules differ — check the official cost disclosure and your agreement before deciding.