Interest accrues daily, but deposits into your account happen on a schedule set by your bank
Most high yield savings accounts calculate interest on your balance every single day. That daily calculation is called accrual. But the money actually hitting your account—called posting or crediting—follows a different timeline. Some banks post interest monthly, some quarterly, and a few do it daily. The difference matters because you only earn interest on money that has posted to your account.
The bank's interest rate is always stated as an annual percentage yield, or APY. That yearly rate gets divided by 365 (or 366 in a leap year) to create a daily rate. Each day, the bank multiplies your balance by that daily rate and adds the result to an invisible tally. When your bank's posting schedule arrives—usually the last day of the month—that tally moves from calculation into your actual balance.
Until interest posts, you cannot withdraw it or earn interest on it. Once it posts, it becomes part of your principal balance and starts earning interest itself the next day.
Key Takeaways
- Interest accrues daily at nearly all high yield savings accounts, but posts (actually appears in your account) on a schedule your bank controls.
- Monthly posting is most common, but some banks post quarterly or daily—check your account agreement or call to confirm your bank's schedule.
- Interest that has accrued but not yet posted does not earn interest itself and cannot be withdrawn.
- The difference between daily accrual and monthly posting is small for most balances but compounds over years.
Why banks accrue daily but post on a schedule
Daily accrual is the standard because it is the fairest way to handle deposits and withdrawals that happen mid-month. If a bank waited until the end of the month to calculate interest, it would have to decide: do you earn interest on money deposited on the 15th? For how many days? The math becomes messy. By accruing daily, the bank credits you for every single day your money sits there, whether you deposited it on the 1st or the 29th.
Posting on a schedule (rather than daily) is a cost decision for the bank. Posting interest requires the bank to process a transaction, update your balance, and send you a notification. Doing that daily for millions of accounts costs more than doing it once a month. Banks pass some of that savings to you in the form of higher APY rates. A bank that posts daily might offer 4.50% APY; one that posts monthly might offer 4.75% APY on the same account type.
Federal law does not mandate how often interest must post. The bank's disclosure document—usually called the Truth in Savings Act disclosure or account agreement—will state the posting schedule. If you cannot find it online, call the bank and ask directly.
How to find your bank's posting schedule
Log into your online banking portal and look for the account agreement, terms and conditions, or disclosures section. Most banks keep this in a "Help" or "Legal" area. Search the page for the words "interest posting," "crediting," or "compounding frequency."
If the document does not say, or if you cannot find it, call your bank's customer service line. Have your account number ready and ask: "How often does interest post to my account?" They will tell you whether it is monthly, quarterly, or daily. Also ask whether the posting happens on a specific date (like the last business day of the month) or a range of dates.
Some online banks display the posting schedule right on the account details page in your login. Others bury it in a PDF. A few smaller banks do not publish it clearly anywhere, which is a sign to move your money—a bank that hides its posting schedule is not being transparent about how you earn.
The math: how much the posting schedule actually matters
The difference between monthly and quarterly posting is real but small for most people. Suppose you have $10,000 in a high yield account earning 4.75% APY, and interest posts monthly. You earn about $39.58 per month (that is $10,000 × 0.0475 ÷ 12). After the first month, your balance is $10,039.58. In month two, you earn interest on that new balance, which is slightly higher. Over a year, that compounding adds up to roughly $487.
If the same account posted quarterly instead, you would earn roughly $475 per year—about $12 less. The difference shrinks as your balance shrinks and grows as your balance grows. For someone with $100,000, the difference between monthly and quarterly posting is closer to $120 per year.
Daily posting would earn you a few dollars more per year than monthly posting, but most banks do not offer it because the cost to them is too high. The trade-off is that banks offering daily posting often have lower APY rates to offset that cost.
What happens to accrued interest if you close your account
If you close your account before interest posts, you lose the accrued interest that has not yet been credited. This is rare but matters if you are moving money quickly. Suppose your bank posts interest on the last day of the month, and you withdraw all your money on the 28th. The interest accrued for those 28 days will not post because your account is closed.
To avoid this, time your withdrawal for after the posting date. If you know your bank posts on the last business day of the month, wait until the first day of the next month to close the account. The accrued interest will have posted by then, and you can withdraw the full balance including that interest.
If you have already closed an account and lost accrued interest, contact the bank and ask whether they will credit it. Some banks will as a courtesy, especially if the amount is small. Most will not, because the account agreement technically allows them to forfeit accrued but unposted interest.
How high yield accounts compare to regular savings accounts
Regular savings accounts at traditional banks often post interest quarterly or even annually. A regular savings account might earn 0.01% APY and post interest four times a year. A high yield savings account at an online bank typically earns 4.50% to 5.35% APY and posts monthly. The higher rate is the main difference; the posting schedule is secondary.
Because high yield accounts earn so much more, the posting schedule matters less. Even if a high yield account posted quarterly instead of monthly, you would still earn far more than a regular savings account posting monthly. The real decision is whether to move to a high yield account at all, not whether to optimize the posting schedule once you are there.
Money market accounts—a hybrid between savings and checking—sometimes offer rates close to high yield savings but with check-writing privileges. They usually post interest monthly as well. The posting schedule across all these account types is fairly standard; the APY is what separates them.
Frequently Asked Questions
Can I withdraw accrued interest before it posts?
No. Accrued interest exists only in the bank's calculation until it posts to your account. You cannot withdraw money that is not yet in your balance. Once interest posts, it becomes part of your balance and you can withdraw it immediately.
Do I pay taxes on accrued interest or posted interest?
You pay taxes on posted interest. The IRS counts interest as income only when it is credited to your account, not when it accrues. Your bank will send you a 1099-INT form in January showing all interest posted during the previous year. Interest that accrued but did not post does not appear on that form.
If I deposit money mid-month, when do I start earning interest?
You start earning interest the day the deposit posts to your account, not the day you initiate the transfer. If you transfer money on the 15th and it posts on the 16th, interest accrual begins on the 16th. Interest will post to your account on your bank's regular posting date—usually the last day of the month.
Why do some banks post interest daily?
A few banks post daily to attract customers who want to see their interest immediately. Daily posting costs the bank more, so they often offset it with a slightly lower APY rate. For most people, the difference between daily and monthly posting is small enough that a higher APY rate at a monthly-posting bank is the better deal.
What if my bank changes its posting schedule?
Banks can change their posting schedule, but they must notify you in advance—usually 30 days. The notification will come by email or mail. If your bank switches from monthly to quarterly posting, your earnings will drop slightly. You can switch banks if the change bothers you; many online banks will waive early closure fees if you move within a certain window after a rate or terms change.