Transparent method
The formula
Worked example
Example inputs
How to interpret the result
Whether a savings goal is being driven mainly by the deposits going in or by the yield the account earns changes what actually moves the needle fastest, and separating the two components of the projection is what reveals which lever, saving more each month or seeking a better rate, actually has more room to help.
Before you rely on it
What to check
Compare how much the projected balance changes from increasing the monthly deposit versus increasing the assumed rate, to see which lever has more real leverage on your specific numbers.
The common error
Where people go wrong with savings growth calculator
Assuming a higher interest rate is always the more impactful lever for reaching a savings goal faster. Depending on the balance size and timeline, increasing the monthly deposit can move the target date meaningfully more than a modest rate improvement would.
Sensitivity evidence
How expected annual return changes the future value
| Expected annual return | Future value | Estimated growth |
|---|---|---|
| 2.5% | $47,270 | $6,270 |
| 3.5% | $50,121 | $9,121 |
| 4.5%worked example | $53,194 | $12,194 |
| 5.5% | $56,508 | $15,508 |
| 6.5% | $60,082 | $19,082 |
Every input, tested
Which input moves the future value most
| Input | Tested from | To | Future value at each end | Swing |
|---|---|---|---|---|
| Time horizon | 7.0 years | 13.0 years | $36,403 to $72,407 | $36,004 (68%) |
| Monthly contribution | $270 | $330 | $48,658 to $57,730 | $9,072 (17%) |
| Expected annual return | 3.5% | 5.5% | $50,121 to $56,508 | $6,386 (12%) |
| Starting amount | $4,500 | $5,500 | $52,411 to $53,978 | $1,567 (2.9%) |
| Compounds per year | Annually | Daily | $53,124 to $53,201 | $76 (0.1%) |
Two variables at once
Future value by expected annual return and starting amount
| Expected annual return \ Starting amount | $4,000 | $5,000 | $6,000 |
|---|---|---|---|
| 2.5% | $45,986 | $47,270 | $48,554 |
| 3.5% | $48,703 | $50,121 | $51,540 |
| 4.5% | $51,627 | $53,194 | $54,761 |
| 5.5% | $54,777 | $56,508 | $58,239 |
| 6.5% | $58,170 | $60,082 | $61,994 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Starting amount | $5,000 |
| Monthly contribution | $300 |
| Expected annual return | 4.5% |
| Time horizon | 10.0 years |
| Compounds per year | Monthly |
| Future value | $53,194 |
| Estimated growth | $12,194 |
Complete evidence
Full projection schedule
Show all 10 rows
| Period | Opening balance | Contribution | Growth | Ending balance |
|---|---|---|---|---|
| Year 1 | $5,000 | $3,600 | $225 | $8,825 |
| Year 2 | $8,825 | $3,600 | $397 | $12,822 |
| Year 3 | $12,822 | $3,600 | $577 | $16,999 |
| Year 4 | $16,999 | $3,600 | $765 | $21,364 |
| Year 5 | $21,364 | $3,600 | $961 | $25,925 |
| Year 6 | $25,925 | $3,600 | $1,167 | $30,692 |
| Year 7 | $30,692 | $3,600 | $1,381 | $35,673 |
| Year 8 | $35,673 | $3,600 | $1,605 | $40,879 |
| Year 9 | $40,879 | $3,600 | $1,840 | $46,318 |
| Year 10 | $46,318 | $3,600 | $2,084 | $52,002 |
Where the inputs come from
Starting amount is the balance you have now in the savings account or CD you are modeling, and monthly contribution is the automatic transfer you plan to make. Expected annual return should be the account's APY, which is posted on your bank's rate page, not a stock-market guess. Check whether the rate is fixed or variable, because online savings rates change with the Federal Reserve's policy. Compounds per year matters little for savings, since banks compound daily or monthly.
When the result stops applying
Savings rates fall when the Fed cuts rates, so a fixed-return projection over ten years is optimistic in some periods and pessimistic in others. Interest is taxable as ordinary income in the year it is earned, which the projection ignores. Inflation can erode the purchasing power of a balance that earns less than prices rise. Deposits above $250,000 at one bank are not fully insured.
What to compare it with
Set a target with the savings goal calculator and see how long it takes with the time to save page. The APY calculator converts a quoted rate to a yield, and the emergency fund calculator gives the first goal for most households. For money you will not need for years, the compound interest and retirement savings calculators show investment growth.
People also ask
Frequently asked questions
How much interest will my savings earn?
It depends on the account's APY. Online high-yield savings accounts have paid several times the rate of a typical brick-and-mortar savings account, so shopping for the rate matters.
Are savings accounts safe?
Deposits at FDIC-insured banks and NCUA-insured credit unions are protected up to $250,000 per depositor, per institution and per ownership category.
Should I save or invest for a goal five years away?
Money needed within about five years usually belongs in savings or CDs, since stock prices can fall right before you need the cash. Longer goals can take more risk.