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Savings Calculator
Calculate how long it takes to reach a savings goal with regular deposits and compound interest. We're building this calculator now — check back soon.
Calculate how long it takes to reach a savings goal with regular deposits and compound interest. We're building this calculator now — check back soon.
This savings calculator helps you project how your savings will grow over time with regular deposits, and how long it will take to reach a specific financial goal. Whether you're saving for an emergency fund, a home down payment, a vacation, college tuition, or retirement, this tool shows the combined power of consistent contributions and compound interest on your timeline and final balance.
For regular periodic deposits into an interest-bearing account:
FV = PV × (1 + r)ⁿ + PMT × [((1 + r)ⁿ − 1) / r]
Where PV is your starting balance, r is the periodic interest rate, n is number of periods, and PMT is your regular contribution. The calculator compounds interest monthly to reflect how most savings accounts and CDs actually work, giving a more accurate projection than annual compounding.
Traditional savings accounts at brick-and-mortar banks pay very low interest (often 0.01–0.10% APY). High-yield savings accounts at online banks (Ally, Marcus, SoFi, Marcus by Goldman Sachs, etc.) have historically offered 4–5% APY in recent years — 50–100× more than traditional accounts. HYSAs are FDIC-insured up to $250,000 per depositor per institution.
Savings account interest is quoted as APY (Annual Percentage Yield), which includes the effect of compounding. An account paying 5% APY with monthly compounding has a monthly rate of approximately 0.4167%. APY is higher than APR for the same nominal rate due to within-year compounding — it's the more useful figure for comparing savings accounts.
Emergency funds (3–6 months of essential expenses) should stay liquid in an HYSA — they're not for investment returns. Long-term savings goals beyond 3–5 years are better served by investing in diversified index funds, which historically outperform savings account rates over longer periods despite short-term volatility.
The standard recommendation is 3–6 months of essential expenses in a liquid emergency fund — closer to 6 months if you're self-employed, have variable income, work in a volatile industry, or have dependents. Beyond the emergency fund, additional savings goals depend on your timeline: short-term (under 3 years) goals should stay in savings/CDs; longer-term goals are better served by investments.
Emergency fund: FDIC-insured high-yield savings account at an online bank (best balance of safety, liquidity, and return). Short-term goals (1–3 years): HYSA or short-term CDs. Medium-term (3–5 years): CD ladder or conservative investment allocation. Long-term (5+ years): diversified index fund portfolio in taxable or tax-advantaged accounts.
With compound interest, you earn interest on both your principal and your previously earned interest. A $10,000 deposit at 5% APY earns $500 in year one, making it $10,500. In year two, you earn 5% on $10,500 = $525. Over time, this compounding accelerates growth. Monthly compounding (common for savings accounts) means interest is added to your balance 12 times per year, slightly increasing the effective yield above the stated rate.
Yes — savings account interest is taxed as ordinary income in the year it's earned, even if you don't withdraw it. You'll receive a Form 1099-INT from your bank if you earn more than $10 in interest during the year. This is one reason why HYSAs in taxable accounts are less efficient than tax-advantaged alternatives (HSA, I-bonds) for tax-sensitive savers in higher brackets.
For long-term wealth building beyond savings accounts, see the Investment Calculator and Compound Interest Calculator. The Emergency Fund Calculator helps determine your specific target. The CD Calculator compares certificate of deposit rates against savings accounts for short-term deposits.