Savings Calculator
Most savings goals are not built from a lump sum — they are built from a monthly habit. This calculator combines a starting balance with recurring deposits and shows what the account becomes, which is the fastest way to answer the only two questions that matter: how long will this take, and how much do I need to put in each month.
Inputs
Result
365,697.59
Total saved 320,000
How the savings calculator works
Future value has two parts. The starting balance grows as P × (1 + i)^n, and the deposits grow as an annuity: D × ((1 + i)^n − 1) ÷ i, where i is the periodic rate and n the number of deposits.
Total contributed is P + D × n. Anything above that in the final balance is interest, and that share grows non-linearly with time.
To solve for the deposit needed to hit a target: D = (Target − P × (1 + i)^n) × i ÷ ((1 + i)^n − 1).
Worked example: 25,000 start, 500 a month, 5% for 10 years
- Periodic rate i = 0.05 ÷ 12 = 0.0041667. Deposits n = 120.
- Starting balance grows to 25,000 × 1.0041667^120 = 41,180.
- Deposits grow to 500 × (1.0041667^120 − 1) ÷ 0.0041667 = 77,641.
- Final balance ≈ 118,821 from 85,000 contributed — 33,821 is interest.
- Extend to 20 years and the balance reaches about 271,000, with interest now exceeding contributions.
Common mistakes to avoid
Assuming the interest share stays constant
In year one interest is a rounding error; by year fifteen it can exceed your deposits. Judging a savings plan on its first two years always leads to quitting too early.
Modelling a growth rate you cannot get on cash
Savings accounts pay cash rates. If you plug in 10%, you are modelling an equity portfolio and should also model the possibility of a down year.
Forgetting to index the deposit
A fixed 500 a month loses purchasing power. Raising the deposit with your income each year changes the outcome far more than chasing a slightly better rate.
Frequently asked questions
How much should I save each month?
A common benchmark is 20% of take-home pay across emergency fund, retirement and goals. Work backwards from your target with this calculator to get a specific number.
Do deposits at the start or end of the month matter?
Slightly. Depositing at the start earns one extra period of interest per deposit, typically adding well under 1% to the final balance.
Is it better to save monthly or invest a lump sum?
A lump sum has more time in the market and usually wins mathematically, but monthly saving is what most people can actually sustain and it smooths entry prices.
Should I fill my emergency fund before other goals?
Yes. Without three to six months of expenses in cash, any shock turns into credit card debt at rates that dwarf any savings return.
How do I account for inflation in a savings goal?
Either inflate the target by the expected rate, or run the projection with a real rate — nominal return minus inflation — and read the answer in today's money.
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