How the savings calculator works
The calculator follows your savings account month by month. Each month the balance earns interest, and your deposit is added. Interest stays in the account, so next month it earns interest too. It answers three questions:
- How much I’ll have: the balance after a number of years.
- Monthly saving for a goal: how much to put away each month to hit a target by a date.
- Time to reach a goal: how many months it takes at the deposit you can afford.
The rate you enter is the APY (annual percentage yield). APY already includes compounding. So if a bank pays 4% APY, the balance grows by (1.04)^(1/12) − 1 = 0.327% each month, whether the bank compounds daily or monthly. You never have to guess the compounding schedule.
Final balance = P × (1 + g)^n + D × ((1 + g)^n − 1) ÷ g
P = starting balance, D = monthly deposit, n = number of months
For a goal, the calculator turns the formula around. The monthly saving needed is D = (Goal − P × (1 + g)^n) × g ÷ ((1 + g)^n − 1). For the time, it adds months until the balance first passes the goal.
Worked example 1: saving $300 a month
You have $5,000 saved and add $300 at the end of each month to an account paying 4% APY. After 5 years:
- Deposits: $5,000 + 60 × $300 = $23,000
- Interest: about $2,937
- Final balance: about $25,937
If 22% of the interest goes in federal income tax, the balance after tax is about $25,252. Interest is taxed as you earn it, so the tax also slows the compounding a little.
Worked example 2: a $25,000 goal
Now say you want $25,000 in 5 years, starting from the same $5,000 at 4% APY.
- Monthly saving needed: about $286 a month. Your $5,000 grows to about $6,083 by itself, and interest on your deposits does part of the rest.
- Time at $300 a month: 4 years 10 months (58 months). You pass $25,000 in month 58 with about $25,171.
Worked example 3: an emergency fund
Many people aim for three to six months of essential costs in an easy-access account. Say that is $15,000, you are starting from zero, and you want it within 2 years at 4% APY. You need to save about $602 a month. Without any interest you would need $625 a month, so interest saves you about $23 a month.
How much the rate matters
The table shows the first example ($5,000 plus $300 a month for 5 years) at different APYs. You deposit $23,000 in every case.
| APY | Final balance | Interest earned |
|---|---|---|
| 0.5% | $23,349 | $349 |
| 1% | $23,703 | $703 |
| 2% | $24,426 | $1,426 |
| 3% | $25,171 | $2,171 |
| 4% | $25,937 | $2,937 |
| 5% | $26,726 | $3,726 |
The FDIC publishes national average deposit rates each month. In October 2026 the average savings account paid 0.38%. Many online and high-yield accounts paid far more. On a $10,000 balance left for 5 years, 0.4% earns about $202, while 4% earns about $2,167. Moving your savings can be worth more than any coupon.
APY vs APR vs interest rate
Banks show two numbers for savings. The interest rate is the yearly rate before compounding. The APY is the yearly growth after compounding, so it is a little higher. For example, 4% compounded monthly is an APY of 4.074%. The Truth in Savings Act (Regulation DD) requires US banks to disclose the APY, which makes accounts easy to compare. APR is a loan term, not a savings term. If you only know the rate and the compounding, the compound interest calculator works from those.
Tax and inflation
- Tax. In the US, savings interest counts as ordinary income in the year it is paid, and banks send Form 1099-INT for interest of $10 or more. Enter your rate under More options to see the after-tax result.
- Inflation. If prices rise faster than your after-tax rate, your money buys less each year even as the balance grows. Switch on “today’s money” to see the real value. The calculator warns you when your rate is below inflation. The inflation calculator shows what past inflation did to prices.
Is your savings account safe?
At an FDIC-insured bank, deposits are insured up to $250,000 per depositor, per bank, for each account ownership category. Savings, checking, money market deposit accounts and CDs are all covered. Credit unions have the same level of cover through the NCUA. If you hold more than the limit at one bank, spread it across banks or ownership categories.
Tips to save faster
- Pay yourself first. Set an automatic transfer on payday, so saving happens before spending.
- Save raises and windfalls. Put part of each pay rise, tax refund or bonus straight into savings.
- Lock in a rate for money you will not touch. A CD fixes the rate for a term. Use the CD calculator to compare.
- Invest long-term money. Cash is best for goals within a few years. For goals 10 or more years away, the investment calculator shows what a stock and bond mix might do.
- Check your progress. Track your savings next to your debts with the net worth calculator.
This calculator assumes the APY stays the same for the whole period. Savings rates can change at any time, so check your account each year and rerun the numbers.