How the savings goal calculator works
Your savings grow in two ways: the deposits you make and the interest the balance earns. The calculator uses the future value of an annuity, the standard formula for a fixed deposit at the end of each month, with interest compounded monthly at the yearly rate divided by 12.
In the time to reach goal mode the calculator steps through the months until the balance reaches the goal, so the answer is a whole number of months. The last deposit may take you a little past the goal.
Interest helps, but on short deadlines it helps less than you might think. To save $10,000.00 from nothing, these are the monthly deposits:
| Deadline | No interest | 4% a year | 5% a year |
|---|---|---|---|
| 12 months | $833.33 | $818.17 | $814.41 |
| 24 months | $416.67 | $400.92 | $397.05 |
| 36 months | $277.78 | $261.91 | $258.04 |
| 60 months | $166.67 | $150.83 | $147.05 |
Tips to reach a savings goal faster
- Automate it. Set up a transfer on payday so the money moves before you can spend it.
- Give every goal its own account or bucket. Seeing the balance for one goal is more motivating than one big pot.
- Shop for the rate. High-yield savings accounts and CDs often pay far more than a checking account. Check the APY.
- Raise the deposit with every raise, and put part of any bonus, tax refund or gift toward the goal.
- Start with an emergency fund. A few months of essential expenses keeps a surprise bill from wiping out your other goals.
How to use the savings goal calculator
- 1Choose whether you want the monthly amount needed or the time to reach your goal. Give the goal a name if you like, or tap a quick goal.
- 2Enter the goal amount, what you have saved so far and the interest rate. Then add a deadline in months or as a date, or the amount you can save each month.
- 3Read how much to save or how long it takes, how much comes from interest, and open the schedule to see each month or year. Copy the result or share a link.
Frequently asked questions
How much should I save each month to reach my goal?
Take the goal, subtract what your current savings will grow to by the deadline, and spread the rest over the months you have, with the interest the deposits earn along the way. That is what the calculator does. Without interest it is simply the missing amount divided by the number of months.
What interest rate should I use?
Use the rate your savings account actually pays, its APY, or a little less if the rate can change. For goals a few years away, most people keep the money in savings accounts, money market funds or CDs. If you leave the rate at 0, the result shows exactly what you need to put aside yourself.
Are deposits made at the start or end of the month?
At the end of each month, and interest is compounded monthly at the yearly rate divided by 12. If you save right after payday at the start of the month, you will reach the goal very slightly sooner than shown.
What if I cannot afford the monthly amount?
Push the deadline back, lower the goal, or start with a smaller amount and raise it with every pay raise. Switch to the time to reach goal mode and enter what you can save each month to see when you would get there.
Should I invest the money instead?
For money you need within a few years, like an emergency fund, a vacation or a down payment, most people choose safe savings, because stocks can drop right before you need the cash. For goals more than five years away, investing may make sense. This is an estimate, not financial advice.