Savings goal calculator

Your current savings grow at the monthly rate (annual rate / 12) until the target date. The calculator works out how much of the goal is left after that growth, and then finds the monthly deposit that fills the gap, using the future value of a series of equal deposits made at the end of each month:

monthly deposit = (goal − current savings × (1 + r)^n) × r / ((1 + r)^n − 1)

where r is the monthly rate and n the number of months. At 0% interest it's simply the remaining amount divided by the number of months.

In the "How long" mode, it adds your deposit month by month, with interest, until the balance reaches the goal.

You want $20,000 in 3 years, have $2,000 saved already, and your high-yield savings account pays 4%.

1. Your $2,000 grows to about $2,254.54 in 36 months.
2. That leaves about $17,745 to save.
3. Monthly deposit: about $464.77.

Over the three years you put in $18,731.54 of your own money and earn about $1,268.46 in interest. At $500 a month instead, you'd reach $20,000 in 34 months.

A common rule of thumb is three to six months of essential expenses in an easy-to-reach account. Say that's $10,000 and you're starting from $1,000, saving $300 a month at 4.5%: you'd get there in 29 months.

Without interest, saving $10,000 from zero in 2 years takes $416.67 a month. Interest helps, but over short periods most of the progress comes from your deposits; the rate matters more the longer the horizon.

For goals a few years away, most people prioritize safety and access over growth:

• High-yield savings accounts pay variable rates and keep your money available. Deposits at FDIC-insured banks are insured up to the legal limit per depositor, per bank, per ownership category.
• Certificates of deposit (CDs) lock in a rate for a set term, with a penalty for early withdrawal.
• Treasury bills and I bonds are backed by the US government; I bonds have a minimum holding period.
• Money market funds often pay competitive yields but are not FDIC-insured.

Stocks can grow more over long periods, but they can also fall just when you need the money, so they're generally better suited to goals more than five years out. Rates on savings change over time; use a cautious figure if you're not sure.

• Automate it. Schedule a transfer for the day after payday so the money moves before you can spend it.
• Split big goals. Separate accounts or buckets for each goal make progress easy to see.
• Use windfalls. A tax refund or bonus can cut months off the timeline; run the calculator again with the new balance.
• Revisit the rate. If your bank lowers its rate, the monthly amount you need goes up slightly. Re-check every few months.
• Adjust for inflation. For goals several years away, the price of what you're saving for may rise. Add a few percent a year to the goal to be safe.

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Interest compounds monthly at the annual rate divided by 12, which is close to the APY a bank quotes. Deposits are made at the end of each month, the rate stays the same for the whole period, and taxes on interest are ignored; interest on regular savings is generally taxable income. This is an estimate for planning, not financial advice.