Savings Calculator
See how a savings account grows with a monthly deposit and the APY your bank pays, year by year.
About the Savings Calculator
Banks advertise savings accounts by APY (annual percentage yield, also called AER in the UK): the interest you earn in a year once compounding is included. This calculator converts the APY into the exact monthly rate, so a 4% APY gives exactly 4% over a full year.
Small, steady deposits add up. Raising your deposit each year with your pay keeps your savings growing in step with your income.
The formula
Bₘ = Bₘ₋₁ × (1 + i) + D, where i = (1 + APY)^(1/12) − 1
- B
- balance at the end of each month
- i
- monthly interest rate equivalent to the APY
- D
- monthly deposit, made at the end of each month
With no deposits this is simply Starting balance × (1 + APY)^years.
How to read your result
- Savings after N years is your projected balance.
- Interest earned shows what the bank paid you; tax on interest lowers it if you enter a rate.
- Use the yearly table to set milestones, such as an emergency fund target.
Worked example
$5,000 plus $300 a month at 4% APY for 5 years
- Monthly rate = 1.04^(1/12) − 1 = 0.327%
- Deposited = $23,000
- Interest = $2,936.97
- Balance = $25,936.97
Things to keep in mind
- Savings rates change; most accounts don't lock the rate for years.
- Inflation reduces what your savings will buy.
- Deposit-insurance limits apply per bank (for example US$250,000 under FDIC).
Questions people ask
What is the difference between APY and the interest rate?
The interest rate (APR or nominal rate) ignores compounding. APY includes it, so APY is the number to compare between accounts.
How much should I keep in savings?
A common guide is an emergency fund of three to six months of essential spending before saving for other goals.