How to use the savings calculator
- Enter your initial deposit, or leave it at zero if you are starting from scratch.
- Set your monthly deposit amount to reflect what you plan to contribute each month.
- Type in the annual percentage yield (APY) offered by your bank or credit union.
- Choose the number of years you want to project into the future.
- Read the final balance, total interest and total contributions below.
How the projection works
The calculator turns the APY into a monthly rate with r = (1 + APY)^(1/12) - 1. At 4.5% APY that is 0.3675% a month, not 4.5 / 12 = 0.375%. Each month the balance earns r, then your deposit is added at the end of the month, so a deposit starts earning in the following month. After 12 months the balance has grown by exactly the APY, which is what the bank's number promises.
Worked example: $1,000 to start, $200 a month, 4.5% APY, 10 years (120 months). The $1,000 grows to $1,552.97 and the 120 deposits grow to $30,095.13. The final balance is $31,648.10, of which you deposited $25,000, so interest earned is $6,648.10. With a zero rate the balance is just the initial deposit plus monthly deposit times months.
Reference scenarios
Each row starts from zero and adds the monthly deposit shown, with the APY held constant. The figures come from this calculator and were cross-checked against a separate month-by-month script.
| Monthly deposit | APY | Years | Final balance | Interest earned |
|---|---|---|---|---|
| $100 | 4.00% | 5 | $6,617.90 | $617.90 |
| $100 | 5.00% | 5 | $6,781.37 | $781.37 |
| $250 | 4.50% | 10 | $37,618.92 | $7,618.92 |
| $500 | 5.00% | 20 | $202,902.24 | $82,902.24 |
| $1,000 | 4.00% | 30 | $685,270.56 | $325,270.56 |
The last row shows the effect of time: $1,000 a month at 4% for 30 years deposits $360,000 and earns about $325,000 on top.
Working backwards from a goal
To reach a target, change the monthly deposit until the final balance matches it. For $20,000 in five years at 4.5% APY from nothing, the deposit needed is $298.54 a month (the closed form is goal times r divided by ((1 + r)^60 - 1), with r = 0.3675%). Round up to $299 to be safe. A bank that cuts its rate halfway through will leave you short, so treat the APY as an assumption and re-run the numbers when it changes.
APY, APR and the rate you type in
Enter the APY, the figure banks are required to advertise because it already includes compounding. If an account quotes only a nominal rate (APR) compounded monthly, convert it first: APY = (1 + APR / 12)^12 - 1. A 4.40% nominal rate compounded monthly is a 4.49% APY. Typing an APR in the APY box understates earnings slightly; typing an APY into a calculator that divides by 12 overstates them.
Banks that credit interest daily and pay monthly land on the same balance as this model to within a few cents on typical balances. For fixed terms and early withdrawal rules use the cd calculator.
What this does not model
Interest is shown before tax; in the US, savings interest is ordinary income and is reported on Form 1099-INT. Rates on savings accounts are variable and can change at any time, deposits are assumed to be level and on time, and fees and minimum balances are ignored. FDIC insurance covers up to $250,000 per depositor, per insured bank, per ownership category. This is an estimate, not financial advice. For longer horizons see the retirement calculator or the roth ira calculator.
Mistakes that skew the result
Entering 0.045 instead of 4.5 gives a result near zero. Entering a promotional rate that expires after a few months overstates a ten-year projection. Using the APR from a loan offer is not the same thing as a deposit APY. Fractional years are rounded to whole months, so 2.5 years is 30 months, and zero years returns only your starting balance.
Method and sources
Method: future value of a lump sum plus an ordinary annuity, at the monthly rate derived from the APY. Source for the APY definition: the Truth in Savings regulation (Regulation DD, 12 CFR 1030), which defines APY as the annualised yield after compounding. FDIC limit: fdic.gov deposit insurance FAQ.
Worked examples
| Example | Input | Result |
|---|---|---|
| High yield savings account | Initial deposit ($): 5000; Monthly deposit ($): 300; Annual percentage yield (%): 5; Time (years): 5 | Final balance: $26,725.53; Total interest earned: $3,725.53; Total contributions: $23,000.00; Initial deposit: $5,000.00; Total monthly deposits: $18,000.00; Months: 60 |
| Simple savings plan | Initial deposit ($): 0; Monthly deposit ($): 100; Annual percentage yield (%): 4; Time (years): 10 | Final balance: $14,669.59; Total interest earned: $2,669.59; Total contributions: $12,000.00; Initial deposit: $0.00; Total monthly deposits: $12,000.00; Months: 120 |
| Lump sum only | Initial deposit ($): 10000; Monthly deposit ($): 0; Annual percentage yield (%): 4.5; Time (years): 20 | Final balance: $24,117.14; Total interest earned: $14,117.14; Total contributions: $10,000.00; Initial deposit: $10,000.00; Total monthly deposits: $0.00; Months: 240 |
| Short term goal | Initial deposit ($): 500; Monthly deposit ($): 250; Annual percentage yield (%): 5.25; Time (years): 2 | Final balance: $6,858.17; Total interest earned: $358.17; Total contributions: $6,500.00; Initial deposit: $500.00; Total monthly deposits: $6,000.00; Months: 24 |
FAQ
What is the difference between APY and APR for savings?
APY is the effective yield after compounding; APR is the nominal rate before it. This tool expects the APY and converts it to a monthly rate with (1 + APY)^(1/12) - 1, so after 12 months the balance has grown by exactly the APY.
Can I use this as a high yield savings calculator?
Yes. Enter the account's advertised APY. Remember that high yield rates are variable, so rerun the numbers if the rate changes.
Does this savings calculator account for taxes on interest?
No. The results are before tax. To estimate an after-tax figure, multiply the APY by (1 - your marginal tax rate) and enter that.
How does this differ from a compound interest calculator?
A compound interest calculator often focuses on a single lump sum growing over time. This savings calculator adds recurring monthly contributions using the annuity formula, which better reflects how most people actually build savings.
Why does my bank balance differ by a few cents?
Banks usually accrue interest daily and credit it monthly, and they round each credit to the cent. This model compounds exactly once a month, so expect differences of a few cents on typical balances.
When is the deposit added each month?
At the end of the month, after that month's interest. A deposit made on day 1 would earn about one extra month of interest, so real balances are slightly higher if you deposit early in the month.