Savings Calculator
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What Your Result Means
- Total Savings: Your projected balance at the end of the time period, including both your deposits and all accumulated interest. This is the number you can expect to see in your account.
- Total Deposits: The sum of your initial deposit plus all monthly contributions — the money that came directly from you, without any growth.
- Interest Earned: The difference between total savings and total deposits — the amount generated purely by compound growth on your money.
- Benchmark: If interest earned exceeds your total deposits, compound growth is doing more of the heavy lifting than your contributions. This crossover typically takes 15–20 years at moderate rates.
How This Calculator Works
You enter an initial deposit, monthly contribution, annual interest rate, and time period in years. The tool applies the future value formula with monthly compounding: FV = P(1+r)^n + PMT((1+r)^n − 1)/r, where r is the monthly rate and n is total months. It separates the result into deposits and interest so you can see how much growth comes from compounding versus contributions.
Quick Questions
What interest rate should I use?
For a high-yield savings account, use the current APY offered by your bank (typically 4–5% in 2024–2025). For CDs, use the quoted rate. For investment accounts, historical stock market averages are roughly 7–10% nominal, but returns vary year to year.
How does compounding frequency matter?
This calculator compounds monthly, which is standard for most savings accounts. Daily compounding produces a slightly higher result, but the difference is usually less than 0.05% per year. APY already accounts for compounding frequency.
Does this account for taxes on interest?
No. Interest earned in taxable accounts is generally subject to federal and state income tax. The effective after-tax return is lower. Tax-advantaged accounts like IRAs and 401(k)s defer or eliminate this tax.
What about inflation?
The result is in nominal dollars. To estimate purchasing power, subtract expected inflation (roughly 2–3% annually) from your interest rate. A 5% nominal rate with 3% inflation gives roughly 2% real growth.
Can I change the contribution amount over time?
This tool assumes a fixed monthly contribution. If you expect to increase deposits, run the calculator for each phase separately and add the results, or re-run periodically with updated inputs.
Sources
- SEC Investor.gov — Compound Interest Calculator (compound growth formula reference)
- FDIC — Deposit Insurance (savings account protection limits)
- Federal Reserve H.15 Selected Interest Rates (benchmark rates)
Method & review
Estimate only. Results reflect your inputs and standard formulas — they are not financial, tax, legal, health, or investment advice. Verify important decisions with a qualified professional.