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.
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.
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.
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.
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.
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.
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.