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Quick answer
What does the Savings bonus break-even calculate?
When does a signup bonus outweigh a lower savings rate? This calculator uses average savings balance, signup bonus, bonus account apy, and alternative account apy to estimate bonus versus higher interest immediately in your browser.
With the values currently entered, the result is 1.3 years — until higher interest catches the bonus. It also shows annual interest difference, and bonus-account first-year advantage.
How to use the Savings bonus break-even
- Replace the example values with your own numbers.
- Review the result and supporting figures as they update automatically.
- Check the formula and assumptions before using the estimate for a decision.
Inputs used
- Average savings balance
- Signup bonus
- Bonus account APY — entered in %
- Alternative account APY — entered in %
Savings bonus break-even formula
Signup bonus ÷ annual interest difference
Assumptions
- Balance and rates stay constant.
- Eligibility rules and taxes are excluded.
Verify the inputs
Authoritative sources
These sources explain the definitions, factors, or rules behind this tool. Their geographic scope is shown because an official source for one country is not automatically valid somewhere else.
Sources do not endorse Calculum. Check the source date, scope, and your own documents before making a financial, tax, insurance, or reporting decision.
Practical guide
Savings bonus break-even example and edge cases
When does a signup bonus outweigh a lower savings rate? Let's use a concrete example, then look at the assumptions that can move the answer.
Example: A practical savings bonus break-even scenario
For this example, use average savings balance of 10,000, signup bonus of 250, bonus account apy of 2.5 %, and alternative account apy of 4.5 %. These are starting values, so replace them with numbers that match your situation.
- Average savings balance
- 10,000
- Signup bonus
- 250
- Bonus account APY
- 2.5 %
- Alternative account APY
- 4.5 %
Calculated result1.3 yearsuntil higher interest catches the bonus
Start with until higher interest catches the bonus. Then check annual interest difference, and bonus-account first-year advantage to understand what sits behind the main result.
Example results use the default display profile. The calculator above follows your selected country and units.
How to read the result
- Read the main result first. The supporting figures for annual interest difference, and bonus-account first-year advantage explain how the estimate is built.
- The method is Signup bonus ÷ annual interest difference. Keep the units consistent and use values from the same time period.
Edge cases worth checking
When average savings balance is unusual
Balance and rates stay constant. Double-check this input before relying on the result.
When alternative account apy is uncertain
Eligibility rules and taxes are excluded. Run a lower and higher value to see a useful range.
What changes the result most
Average savings balance
Use a current amount for average savings balance. Include fees or recurring costs that belong in the same figure.
Signup bonus
Use a current amount for signup bonus. Include fees or recurring costs that belong in the same figure.
Bonus account APY
Test a lower and higher bonus account apy. A small percentage change can move the final result more than expected.
Try a different scenario
Small changes show whether the answer is stable or sensitive.
Average savings balance: 10% lower
9,0001.4 yearsuntil higher interest catches the bonus
Average savings balance: 10% higher
11,0001.1 yearsuntil higher interest catches the bonus
Signup bonus: 10% higher
2751.4 yearsuntil higher interest catches the bonus
Common mistakes
Check average savings balance
Balance and rates stay constant. Make sure this matches the number you enter.
Keep alternative account apy consistent
Eligibility rules and taxes are excluded. Use the same units and time period throughout the calculation.
Do not rely on one savings bonus break-even scenario
Run a cautious case and an optimistic case. The range is often more useful than one exact-looking number.
Use this result well
When does a signup bonus outweigh a lower savings rate?
A lender’s APR, fees, eligibility rules, and contract control the real offer.