What to enter
- What do you want to find?
- “My balance after a period of saving” projects growth. “How long it takes to reach a goal” solves for time. “The monthly deposit needed for a goal” solves for the contribution. The fields that do not apply to your choice are hidden.
- Current savings
- What you have saved today for this goal. It can be zero.
- Monthly deposit
- The amount you add every month, at the end of the month.
- Savings goal
- The target balance, such as an emergency fund, a down payment or a trip.
- Interest rate (APY)
- The annual percentage yield your account advertises. The APY already includes compounding, so the calculator converts it into an equivalent monthly rate. Variable-rate accounts can change, so revisit the number if your rate moves.
- Time period
- How long you plan to save, in years. Quarter-year steps are allowed.
- Tax rate on interest (optional)
- Interest is generally taxed as ordinary income. Enter your marginal rate to see an after-tax estimate, or leave it at zero for the pre-tax figure. Interest in tax-advantaged accounts may be treated differently.
How to read your results
In every mode the result includes the total you would deposit, including current savings, and the interest earned along the way. The growth chart and the year-by-year table show how the balance builds. If you entered a tax rate, the table notes the after-tax yield used, which is your APY multiplied by one minus the tax rate.
The time-to-goal mode reports how many years and months it takes for the balance to reach the goal, and the balance at that moment. If the goal is already met, it says so. If the deposit and rate cannot reach the goal within 100 years, it says that, too, and you know to raise the deposit. The deposit mode reports the level monthly deposit that hits the goal exactly at the end of the period. If your current savings alone would reach the goal, no deposit is needed.
How the answers are found
The APY is converted to a monthly rate, and the balance is stepped forward month by month: interest is added to the balance, then the deposit is added.
Balancenext = Balance × (1 + monthly rate) + depositWith a tax rate, the APY used is APY × (1 − tax rate).
To find the time to a goal, the calculator repeats that step until the balance reaches the goal. To find the deposit needed, it uses the closed form for the future value of a series of deposits:
Worked example
$2,000 saved, $300 a month, 4.5% APY
After 5 years the balance is $22,590: $20,000 deposited and $2,590 earned as interest.
Setting a $25,000 goal, the same deposit reaches it in 5 years 7 months. Working backward instead, reaching $25,000 in 5 years needs a deposit of $335.98 a month.
Tax. If the interest is taxed at 24%, the after-tax yield falls to 3.42%, and the 5-year balance falls to $21,941. A lower rate. At a 1% APY, the same goal takes 6 years 2 months, which shows how much a competitive rate helps.
Where to keep savings you need soon
Money you will need within a few years generally belongs somewhere stable, where the balance cannot fall. Options include savings accounts, money market accounts and certificates of deposit at banks and credit unions. In the United States, deposits at insured banks are covered by FDIC insurance, and at insured credit unions by NCUA, up to the applicable limits per depositor, per institution and per ownership category. Rates differ a lot between institutions, and online banks often pay more than branch-based banks, so it is worth comparing APYs and checking for fees and minimum balances.
A common suggestion is to build an emergency fund covering several months of essential expenses before pursuing other goals. If your goal is far away and you can accept ups and downs, investing may make sense, and the investment return calculator models that with fees and inflation. If you have high-interest debt, paying it down often beats earning a savings yield, which the debt payoff calculator can test.
Assumptions and limits
The tool assumes the rate stays the same for the whole period, which is unlikely for a variable-rate account. It assumes deposits are made monthly, no withdrawals are made, and interest is compounded in a way consistent with the APY. Taxes are modeled as a simple percentage of the interest and do not account for state tax, deductions or your changing bracket. Inflation is not applied, so a future balance will buy less than the same number does today; the inflation calculator shows by how much.
Frequently asked questions
What is APY?
Annual percentage yield is the yearly return on a deposit, including the effect of compounding. It is the figure to use when comparing savings accounts.
Are savings account rates fixed?
Usually not. Most savings and money market rates are variable and can change at any time. Certificates of deposit lock a rate for a set term, with penalties for early withdrawal.
How much should I save each month?
It depends on your goal, your timeline and your budget. Use the deposit mode to see what a specific goal requires, then compare that with what you can afford.
Is my savings interest taxable?
Interest from most savings accounts is generally taxable as ordinary income. The tax field lets you see an after-tax estimate.
Why does the goal take longer than I expected?
Interest on small balances is modest. Deposits carry most of the growth in the early years, so the monthly deposit matters more than the rate for short-term goals.