Savings Calculator
See how your savings grow with regular deposits and interest.
- Author
- CentCompass Research Team
- Reviewed by
- Editorial Review
- Last Updated
- Reading Time
- 4 min read
Balance at the end
$51,410.00
Total deposited
$41,000.00
Interest earned
$10,410.00
| Year | Balance | Deposited | Interest |
|---|---|---|---|
| 1 | $8,865.53 | $8,600.00 | $265.53 |
| 2 | $12,885.69 | $12,200.00 | $685.69 |
| 3 | $17,066.65 | $15,800.00 | $1,266.65 |
| 4 | $21,414.85 | $19,400.00 | $2,014.85 |
| 5 | $25,936.97 | $23,000.00 | $2,936.97 |
| 6 | $30,639.98 | $26,600.00 | $4,039.98 |
| 7 | $35,531.12 | $30,200.00 | $5,331.12 |
| 8 | $40,617.89 | $33,800.00 | $6,817.89 |
| 9 | $45,908.14 | $37,400.00 | $8,508.14 |
| 10 | $51,410.00 | $41,000.00 | $10,410.00 |
What is the Savings Calculator?
A savings calculator projects how a deposit account grows over time from an opening balance, regular monthly deposits, and the interest the bank credits along the way. Unlike an investment projection, the rate here is contractual rather than assumed — a bank quotes you an APY and pays it — which makes the output far closer to a forecast than to a scenario.
How the calculation works
The calculator takes the annual percentage yield you enter, converts it to the equivalent monthly rate, and applies it to the running balance each month. Your deposit for the month is then added, and the next month's interest is calculated on the larger balance. Because the interest is credited rather than withdrawn, it starts earning interest itself. The result separates what you put in from what the account generated, which is the number most people are actually curious about.
The formula
Each month the balance becomes B × (1 + i) + PMT, where i is the monthly rate and PMT your deposit. Expressed in closed form, the opening deposit grows as P(1 + i)^n while the stream of deposits grows as PMT · [((1 + i)^n − 1) / i], with n the number of months. Because banks quote APY — the rate already inclusive of compounding — the monthly rate is derived as i = (1 + APY)^(1/12) − 1, not APY ÷ 12. Using the simple division would overstate the result.
Worked example
Opening an account with $5,000 and adding $300 a month at a 4% APY for 10 years produces a balance around $51,500. Of that, $41,000 came from your own pocket — $5,000 initially plus 120 deposits of $300 — and roughly $10,500 is interest. Notice the shape: in year one the account earns a few hundred dollars, while in year ten it earns well over a thousand, because the same 4% is being applied to a much larger balance.
Tips
- Compare accounts on APY, which already includes compounding, rather than the nominal rate.
- Automate the monthly deposit — consistency matters more than the size of any single transfer.
- Keep an emergency fund in a liquid savings account rather than locking it into a CD.
- Check whether the advertised rate is promotional and what it reverts to afterwards.
- Confirm the institution is FDIC or NCUA insured before making a large deposit.
Common mistakes
- Entering the APY into a tool that also compounds it, which double-counts the growth.
- Chasing a headline rate on an account with fees or balance minimums that erase the difference.
- Leaving a long-term goal in savings when the horizon would suit an invested account better.
- Reading the projection as spending power and forgetting that inflation erodes it.
- Ignoring that interest in a taxable account is generally taxed in the year it is credited.
Limitations
The projection assumes the APY holds for the entire period, which savings rates rarely do — they float with market conditions and can change at the bank's discretion. It also assumes deposits never miss a month, excludes account fees and balance requirements, reports nominal dollars without adjusting for inflation, and ignores tax on the interest earned.
Frequently asked questions
What is APY?
Annual percentage yield is the effective return over a year once compounding is included. Because it already accounts for interest earning interest, APY is the number to compare across accounts — a 4% APY beats a 4% nominal rate compounded monthly.
How is a savings calculator different from a compound interest calculator?
The arithmetic is identical. The difference is the input: a savings account pays a contractual rate the bank publishes, while a compound interest projection often uses an assumed investment return. That makes the savings output much more reliable.
How often does savings interest compound?
Most US savings accounts compound daily or monthly and credit the interest monthly. The difference between the two is small at typical rates; the APY the bank quotes already reflects whichever schedule it uses.
Is the interest taxable?
Interest in an ordinary savings account is generally taxable income in the year it is credited, and the bank reports it on Form 1099-INT once it passes the reporting threshold. That tax drag is not modelled here.
Is my money insured?
Deposits at FDIC-insured banks and NCUA-insured credit unions are protected up to the applicable limit per depositor, per institution, per ownership category. Balances above that limit at a single institution are not covered.
How much should I keep in savings?
A common guideline is three to six months of essential expenses as an emergency fund, held somewhere liquid. Money you will not need for many years generally belongs in an invested account, where expected returns are higher despite the volatility.
Will the rate stay the same?
Almost certainly not. Savings rates are variable and move with the wider rate environment, so a projection over ten years at today's APY is a useful illustration rather than a promise.
Savings account or CD?
A CD usually pays more but locks the money for a fixed term with a penalty for early withdrawal. Savings stays liquid at a lower rate. Money you might need soon belongs in savings; money you can commit can earn more in a CD.
Does a bigger opening deposit or bigger monthly deposit matter more?
Over long horizons the monthly deposits usually dominate, simply because they accumulate to far more than the opening balance. Over short horizons the opening deposit carries more weight, since the deposits have not had time to add up.
Why does the interest look small in the early years?
Interest is a percentage of the balance, and the balance starts small. The absolute dollars grow as the balance does, which is why the last few years of any projection contribute far more interest than the first few.
Related calculators
Related guides
Sources
- Investor.gov (SEC) — Compound Interest Calculator
- FDIC — Deposit Insurance
- Federal Reserve — H.15 Selected Interest Rates
How this page is produced and reviewed
Editorial process. Content is written by the CentCompass Research Team, then checked against the official publications listed above by Editorial Review before it goes live. This page was last reviewed on . See our editorial policy.
How the calculations work. Every result comes from a small, unit-tested calculation engine rather than a spreadsheet or a hardcoded table. Loans use the standard amortization formula, growth uses compound-interest math, income tax applies the federal progressive brackets, and payroll applies Social Security and Medicare rules. Our methodology sets out each one.
Where the figures come from. Tax brackets, standard deductions, FICA parameters, and contribution limits are stored once in a dated registry and read directly by the calculators — the same values appear in the text above, so the two can never drift apart. Each figure records its source, effective tax year, and review status on our data sources page.
Update policy. Regulatory figures are reviewed when the IRS, SSA, or another authority publishes new values — typically each autumn for the following tax year — and again at the scheduled review date recorded for each dataset. Figures awaiting a second reviewer are marked as draft on the data sources page until that check is complete.
Educational purposes only — not financial, tax, or investment advice (disclaimer).