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Real Yield Index methodology

A savings account's advertised APY is not what a saver actually keeps. Income tax reduces it, and inflation erodes what remains. The Real Yield Index ranks tracked accounts by what is left after both.

The calculation

For each tracked institution, we start with its current tracked APY and apply two adjustments in sequence:

afterTaxApy = apy * (1 - fedMarginal - stateMarginal * (1 - fedMarginal)) realYield   = (1 + afterTaxApy) / (1 + inflation) - 1

fedMarginal and stateMarginal are the saver's marginal federal and state income tax rates — the rate paid on the next dollar of interest income, not their overall effective rate. These come from SwitchWize's existing income-tax engine, which applies the real 2026 IRS federal brackets and each state's own tax code, not a flat estimate.

inflation is the trailing 12-month change in the Consumer Price Index for All Urban Consumers (CPI-U, series CPIAUCSL), sourced from the Federal Reserve Economic Data (FRED) API and refreshed weekly. If a new CPI print has not yet been published, the most recent available reading is used — the index never substitutes a hardcoded number.

Default profile

The published ranking uses a single filer earning $85,000 with no state selected (federal tax only). This is a representative profile, not a universal one: a saver in a different bracket, filing status, or state will see a different after-tax result. State income tax varies from zero (Texas, Florida, Washington, and others) to double digits at the top bracket in a handful of states.

What the aggregate figures mean

  • Share beating inflation is the fraction of tracked accounts whose real yield, under the default profile, is positive.
  • Big-bank real yield applies the same formula to the FDIC's national average savings rate — a proxy for what a saver earns leaving money at a large, non-competitive bank — not a hand-picked list of megabanks.
  • Top-25 median real yield is the median real yield among the 25 highest-ranked tracked accounts.

What this does not measure

This index does not account for account minimums, promotional introductory rates that later step down, FDIC/NCUA insurance limits above $250,000, or a saver's full tax situation (deductions, credits, filing jointly with different income splits, or state tax already paid elsewhere). It is not personalized financial advice. A saver should confirm a specific account's current terms directly with the institution before opening it.

Update cadence

The ranking is recomputed from live tracked rates and the latest available CPI reading continuously (server-rendered on every page load, cached for up to one hour). The underlying tax-bracket data updates annually when the IRS and states publish new figures.