Savings Goal Calculator

How this is worked out

Two things get you to the target: the money you already have, which grows on its own, and the money you add each month, which grows for progressively shorter periods.

The existing balance is easy — it compounds for the whole period:

grown = current × (1 + r)^n

The monthly deposits are the awkward part, because the deposit you make in month one earns interest for the whole term while the one you make in the final month earns nothing. The standard future-value-of-an-annuity formula handles this, and the calculator runs it backwards to solve for the deposit rather than the total.

At normal savings rates over a few years, interest does surprisingly little of the work. That is not a reason to ignore it, but it is a reason not to spend weeks chasing an extra quarter of a point when the real lever is the monthly amount.

A worked example

You want 20,000 in three years, you already have 3,000, and your account pays 2.5%.

• You need about 453 a month
• You contribute about 16,300 in total
• Interest does about 700 of the work

With no interest at all you would need 472 a month. So the account rate is saving you 19 a month. Useful, not decisive.

Stretch the deadline from three years to four and the monthly figure drops to about 328 — a much bigger change than any realistic interest rate could produce. When a goal feels impossible, time is nearly always the more powerful lever than rate.

What this doesn't cover

• Interest is assumed to compound monthly and the rate to stay fixed. Real savings rates move, and introductory bonus rates usually expire after a year.
• Tax on savings interest is not deducted. Depending on where you live and what account you use, some or all of the interest may be taxable.
• Inflation is not applied. If your goal is a thing rather than a number — a car, a deposit — that thing may cost more by the time you get there.

Common questions