Simple interest is paid only on the money you deposit. That's why it pays to understand the different ways interest can be calculated on savings accounts, as explained in more detail below. Of course, the amount of interest a bank pays you for the privilege of holding your cash can vary wildly, since it depends on the specific account's interest rate, the size and frequency of your deposits and the type of interest used (simple or compound). 1 But the real advantage of a savings account comes from the interest you earn on your money. And that's true: Not only are your deposits (up to $250,000) FDIC-insured, but you're also less likely to spend the funds you set aside in a savings account. You might think of savings accounts as a safe place to keep your cash.