Savings Calculator

What this savings calculator does

You have some money in a savings account. You add a bit to it every month, you mostly forget about it, and then one evening you wonder where all of this actually lands you in ten years. That is the question the calculator above answers.

You give it a starting balance, a monthly deposit, an annual rate, how often the interest compounds, and how many years you plan to keep going. It walks forward one compounding period at a time. In each period it credits interest on whatever balance you had, then drops your deposit on top, and repeats until the years run out.

Back comes the final balance, the total you put in yourself, the interest the bank added, and a year by year table so you can watch it grow. All of it runs in your browser. Nothing is sent anywhere and nothing is stored.

Below is how it gets there, an example you can check by hand, and the handful of things that sit between this number and what your bank statement will eventually say.

How to use it

1. Initial Principal. Whatever is in the account today. Starting from scratch? Put zero.
2. Monthly Deposit. What you add each month. Put zero if you just want to watch a lump sum grow on its own.
3. Annual Interest Rate. The yearly rate as a percentage, so type 5 rather than 0.05. Have a look at the rate section before you copy a figure off your bank's website, because the number they advertise is usually a slightly different animal.
4. Interest Compounded. Monthly, quarterly, semi annually or annually. This does change the answer, and further down we have measured by how much.
5. Number of Years. Whole years. The tool steps a year at a time, so six months is not an option here.

Press Calculate for the breakdown, or Reset to clear it.

A habit worth borrowing: run it once with the monthly deposit set to zero, then run it again with a deposit you could actually keep up. The gap between those two numbers is the honest value of the habit, separated out from the value of the money you already have.

How the balance is built up

The tool loops period by period, but that loop is doing something with a tidy closed form behind it. Two pieces, added together.

First your starting money, growing on its own:

Future value of principal = P × (1 + r/n)^n×t

Then the stream of deposits, which is the future value of an ordinary annuity:

Future value of deposits = PMT × [ ((1 + r/n)^n×t − 1) ÷ (r/n) ]

Where P is your initial principal, PMT is the deposit per compounding period, r is the annual rate as a decimal so 5% is 0.05, n is compounding periods per year, and t is years.

The whole thing hinges on that (1 + r/n) bit. It is the growth factor for a single period. Raise it to the power of every period you own and you have compounding. Nothing more mystical than that.

Every savings calculator on the internet has to make a few judgement calls to fill in the rest, and most of them never say which calls they made. That is the real reason two honest tools hand back two different answers. So here are ours, out in the open.

The rate you type, and the one your bank advertises

This is worth getting right before you type anything, because it is the single most common way people end up with a number that is too optimistic.

In the United States, a bank advertising a rate of return has to state it as an annual percentage yield. That is not a marketing choice, it is Regulation DD. And an APY already has compounding baked into it, which is exactly what makes it useful for comparing accounts.

The field above wants the other one, the nominal rate, before compounding. Type an APY in there and the tool compounds it a second time.

How much does that cost? A 5.00% APY compounding monthly works out to a nominal rate of about 4.8889%. Put $10,000 away for ten years and typing 5.00 instead gives you $16,470 where the truth is $16,289. So roughly $181 of interest that was never going to arrive.

If your bank only quotes an APY, convert it first:

nominal rate = n × ((1 + APY)^1/n − 1)

Or just type the APY, know the answer runs a shade high, and read it as a ceiling rather than a forecast.

A worked example: $1,000 and $100 a month

Say you start with $1,000, add $100 every month, at 5% a year compounded monthly, for 10 years. The calculator returns a final balance of $17,175.24, total deposits of $13,000.00, and interest of $4,175.24.

Now let us get to the same place without it.

The periodic rate is 0.05 ÷ 12 = 0.00416667. The number of periods is 12 × 10 = 120. So the growth factor across the whole term is 1.00416667¹²⁰ = 1.6470095.

Your original thousand: 1,000 × 1.6470095 = 1,647.01

Your deposits: 100 × [(1.6470095 − 1) ÷ 0.00416667] = 100 × 155.28226 = 15,528.23

Added together: 1,647.01 + 15,528.23 = 17,175.24

That matches the tool to the cent, which is rather the point of showing you. A savings calculator that cannot be reproduced with a pen is asking you to trust a black box with your money, and nobody should have to do that.

The other thing worth sitting with for a second. You put in $13,000 of your own money and walked away with $17,175. The bank added $4,175, which is a third again on top of everything you deposited. Not because 5% is thrilling. Because you left it alone for ten years.

What the compounding dropdown changes

Same $1,000 and $100 a month at 5% for 10 years. Only the dropdown moves:

Monthly comes out about $453 ahead of annually. Some of that is genuine compounding advantage. But part of it is a modelling choice, and you should know which part.

When you select Annually, the tool gathers your twelve monthly deposits into one lump and drops it at the end of the year, where it earns nothing for that year. Real accounts that credit interest once a year usually still accrue it on your running balance, so money you put in during January does pick up most of a year's worth before the credit lands.

We ran that more realistic version for the same example and it lands near $17,068, which sits between our two settings. So if your account compounds annually but accrues along the way, Annually will read about $346 low over ten years and Monthly will read about $107 high. Monthly is the closer guess of the two.

Modelling that middle case properly is on the list. Until it is done, we would rather you heard it here than from a bank statement.

What $100 a month turns into

Most people arrive at a savings calculator with roughly this question, so here it is on its own. Starting from zero, $100 every month, compounded monthly:

Read across a row and the numbers go up steadily. Read down a column and something more interesting happens. At five years the gap between 2% and 6% is about $672, which is barely worth switching banks over. At twenty five years the same gap is $30,417.

Time is doing the heavy lifting in that table, not the interest rate. The rate only becomes powerful once you have given it enough years to work with.

Scale it however you like, the shape holds. Saving $500 a month is just these figures multiplied by five.

A better rate or a bigger deposit?

Here is a question the calculator can settle, and the answer surprised us a little. Suppose you are putting away $100 a month at 4%. You have two ways to improve things. Chase a better account and pick up a whole extra percentage point, or just find another $10 a month.

Which one wins?

Over ten years the extra tenner a month beats the extra percentage point, and not by a little. It is worth nearly twice as much.

Now stretch it to thirty years:

It flips completely. The extra percentage point is now worth double the extra deposit.

Which makes sense once you see why. A bigger deposit adds money in a straight line. A better rate multiplies everything already sitting there, and multiplication needs runway before it beats addition.

So the practical version. Saving for something three or five years out, a house deposit or a wedding, put your energy into the amount and stop reading rate comparison tables. Saving for something decades away, the account you pick genuinely matters, and it is worth the afternoon of paperwork to move.

Why your statement will read a little differently

Run this, then look at your account in a year, and the two will not line up perfectly. That is expected. Here is what sits in between, roughly in order of how much each one moves the number.

Tax

In most places interest on a savings account is taxable in the year it is credited, whether or not you touch it. Take our example and hand 30% of the interest to tax each period and the ending balance drops from $17,175 to about $15,762. That is $1,414, bigger than everything else on this page combined.

The figure above is gross interest. Your own rate depends on where you live and what else you earn, so run your bracket against it before you make plans with the money.

Inflation

$17,175.24 arriving in ten years is not $17,175.24 of today's money. At 4% inflation it buys about what $11,603 buys now. The balance still grew in real terms, just by rather less than the headline suggests.

The rate moved

Savings rates are variable nearly everywhere and follow the central bank. The tool holds yours flat for the whole term because it cannot predict the next decade of monetary policy, and neither can anybody else. If your account has an introductory rate that drops after six months, run it in two pieces.

Your deposits land on a different day

We put deposits at the end of each period. Several well known calculators put them at the beginning, which hands every deposit one extra period of growth. On $100 a month at 5% over ten years that is worth about $65 in their favour. Small, but it is why two careful tools can disagree.

Getting a second opinion

The US Securities and Exchange Commission runs its own compound interest calculator on Investor.gov, with nothing to sell you. Run your figures through both. When two independently built tools agree, you can stop worrying about the arithmetic and start worrying about the assumptions, which is where the real money always was.

Questions people ask

Should I enter my APY or my interest rate?

The interest rate, the nominal one. If your bank only advertises an APY, convert it with n × ((1 + APY)^1/n − 1), or accept that the result will run slightly high and treat it as a ceiling.

How much do I need to save each month to reach a goal?

Turn the formula around. The monthly deposit you need is PMT = FV × (r/n) ÷ ((1 + r/n)^n×t − 1). To reach $10,000 in three years at 4% compounded monthly, that is $261.91 a month. You would deposit $9,428.63 of your own money and the interest covers the remaining $571.37.

Why does monthly compounding beat annual?

Interest gets added to the balance more often, so it starts earning on itself sooner. Part of the gap in this tool is also the deposit bundling described in the compounding section, which is a modelling choice rather than a real world effect.

Can I use this for a fixed deposit or a recurring deposit?

For a fixed deposit, set the monthly deposit to zero and it works properly. For a recurring deposit it gets close, though many banks compound those quarterly while taking monthly instalments, so pick Quarterly and read it as an approximation.

Does it work in currencies other than dollars?

Yes. The labels say dollars, the maths does not care. A percentage is a percentage everywhere.

Why can I not enter half a year?

The tool steps in whole years. For shorter horizons, run one year and read the appropriate row of the yearly table, or use a compound interest calculator that accepts months.

Is anything I type saved?

No. The whole calculation happens in your browser. Nothing is sent to us and nothing is stored.

References

A note on where the figures come from. The definition of annual percentage yield, and the rule that banks must advertise using it, are set out in Regulation DD, which is the Consumer Financial Protection Bureau's implementation of the US Truth in Savings Act. The annuity mathematics behind the deposit stream, including the distinction between an ordinary annuity and an annuity due that decides our deposit timing, is standard and set out in the sources below. The tax point follows the Internal Revenue Service's own guidance on interest received.

1. Consumer Financial Protection Bureau, Appendix A to Part 1030, Annual Percentage Yield Calculation. https://www.consumerfinance.gov/rules-policy/regulations/1030/A
2. Electronic Code of Federal Regulations, 12 CFR Part 1030, Truth in Savings (Regulation DD). https://www.ecfr.gov/current/title-12/chapter-X/part-1030
3. OpenStax, Principles of Finance, Section 8.2, Annuities. https://openstax.org/books/principles-finance/pages/8-2-annuities
4. Kellison, S. G., The Theory of Interest, 3rd edition, McGraw-Hill, 2008.
5. Internal Revenue Service, Topic No. 403, Interest Received. https://www.irs.gov/taxtopics/tc403
6. U.S. Securities and Exchange Commission, Office of Investor Education and Advocacy, Compound Interest Calculator. https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator