Savings Calculator: Project Future Balance & Interest Growth
Free savings calculator to project how your savings will grow over time with regular deposits and compound interest. Plan for your financial goals with detailed projections and customizable options.
Category: Financial
Frequently Asked Questions
How does compound interest grow my savings?
Compound interest works by earning interest not only on your initial deposit and contributions, but also on the accumulated interest over time. This creates a snowball effect that accelerates your savings growth, especially over longer time periods. The more frequently interest compounds (daily, monthly, etc.), the more your money grows.
What's the difference between simple and compound interest?
Simple interest pays interest only on your principal (initial deposit), while compound interest pays interest on both your principal and on previously earned interest. For example, with $1,000 at 5% simple interest, you'd earn $50 per year, always. With compound interest, you'd earn $50 the first year, then $52.50 the second year (5% of $1,050), and so on, growing exponentially.
How much should I save each month?
A common guideline is to save at least 20% of your income, but the ideal amount depends on your financial goals, timeline, and current situation. For retirement, many experts recommend saving 15-20% of your gross income. For emergency funds, aim for 3-6 months of expenses. Use this calculator to see how different monthly contribution amounts affect your long-term savings.
Which compound frequency should I choose?
Generally, more frequent compounding (daily vs. monthly vs. annually) results in higher returns, though the difference becomes smaller at lower interest rates. Many banks compound interest daily or monthly. When comparing saving options, pay attention to both the interest rate and the compounding frequency to maximize your returns.
How can I maximize my savings growth?
To maximize savings growth: 1) Start early to take advantage of compound interest over time, 2) Make regular contributions, even small ones add up, 3) Choose accounts with higher interest rates and more frequent compounding, 4) Increase your contributions whenever possible, such as after receiving a raise, and 5) Avoid withdrawals to keep the compound effect working.