How to use the savings calculator
- Choose what to find: how long to reach a goal, the monthly deposit needed, or your balance after a set time.
- Enter your current savings and the annual interest rate (APR). Interest is compounded monthly.
- Fill in the fields that match your choice: a goal amount, a monthly deposit, or a time in years and months.
- Read the answer at the top, then check the yearly progress table. The CSV has the same table.
Formula
Monthly rate i = APR / 12; deposits are made at the end of each month
Balance after n months = S x (1 + i)^n + D x ((1 + i)^n - 1) / i
Deposit needed = (Goal - S x (1 + i)^n) x i / ((1 + i)^n - 1)
Time to goal = the smallest whole number of months n where the balance reaches the goal
S is your current savings and D is the monthly deposit. At 0% interest, the balance is simply S + D x n. A calculated deposit is rounded up to the next cent so the goal is actually met.
Worked examples with $2,000 saved at 4% APR
How long: saving $400 a month toward $20,000 takes 42 months (3 years 6 months). After month 41 the balance is $19,834.62, and after month 42 it is $20,300.74. You deposit $16,800 and earn $1,500.74 in interest.
Deposit needed: to reach $20,000 in 3 years (36 months) you need $464.765 a month, rounded up to $464.77. That ends with $20,000.19.
Future balance: depositing $400 a month for 36 months leaves you with $17,527.17, made up of $2,000 you started with, $14,400 in deposits and $1,127.17 in interest.
Setting a realistic goal
Put the goal in terms of a purchase or a buffer, such as a down payment, a car, a vacation or a few months of expenses. Work backward from the date you need the money. If the required deposit is more than you can manage, extend the time, lower the goal or look at a higher-yield account. Even small changes in time have a large effect, because every deposit adds to the base that earns interest.
How interest rates affect the answer
At typical savings rates, deposits matter much more than interest over short periods. In the example above, interest supplies about $1,500 of a $20,000 goal. At higher rates or much longer periods the share grows. Check the compound interest calculator to explore longer horizons and other compounding schedules, and the retirement calculator for long-term investing.
When the goal cannot be reached
If you are earning 0% and make no deposits, savings never grow. The tool tells you when a goal cannot be reached within 100 years instead of showing a meaningless result. If your current savings already meet the goal, it reports 0 months.
Assumptions and limits
- The interest rate is fixed and compounded monthly at APR / 12. Savings account rates in the real world change over time.
- Deposits are equal, made at the end of each month, and the first deposit is one month from now.
- Interest is not taxed here and no fees are subtracted. Taxes, fees and inflation are not modeled.
- Balances are calculated without rounding each month, and shown rounded to the cent.
- The time is limited to 100 years. A deposit needed is rounded up to the next cent.
- This is an estimate for planning, not financial advice.
Frequently asked questions
How long will it take to save a goal amount?
It depends on what you start with, how much you add each month and the interest rate. Enter all three and the calculator finds the first month in which the balance reaches your goal.
How much do I need to save each month?
Choose the monthly deposit option, then enter the goal, your current savings, the interest rate and how long you have. The result is the level deposit that reaches the goal at the end of that time.
Is the interest compounded daily or monthly?
Monthly here, at the annual rate divided by 12. Many banks compound daily, which gives a slightly higher balance. For a closer match, use the compound interest calculator with daily compounding.
Why is the deposit rounded up?
The exact deposit usually has a fraction of a cent. Rounding to the nearest cent could leave you a few cents short of the goal, so the calculator rounds up and shows the balance you would end with.