Savings Calculator

Note: Results shown are in today's dollars and do not account for inflation. Over long time horizons, the purchasing power of your final balance will be lower than the nominal figure shown.

How compound interest works

Compound interest means you earn interest not just on your initial deposit, but also on all the interest you've already earned. Over long time horizons, this compounding effect dramatically accelerates growth — often called "the eighth wonder of the world."

This calculator compounds monthly, which is the most common schedule for savings accounts and investment portfolios. Each month, your interest rate is divided by 12 and applied to your current balance, then your monthly contribution is added.

If I save $200/month for 5 years, how much money will I have in my savings?

Saving $200 a month for 5 years means you'll put away $12,000 of your own money — but how much you end up with depends heavily on where you keep it. At a traditional big bank paying 0.01% APY, you'd finish with roughly $12,003 — barely more than what you deposited. Move that same $200/month to a high-yield savings account at 4.50% APY and you'd end up with about $13,409 — over $1,400 more, just by choosing a different institution. Put it into a brokerage account invested in a broad index fund averaging 7% annually, and the balance grows to roughly $14,318. The math is the same in every case; the only variable is the interest rate your money earns. Before setting up automatic savings, it's worth spending five minutes comparing APYs — the difference compounds every single month.

Tips for maximizing savings growth

• Start as early as possible — time is the most powerful variable in compound growth.
• Increase monthly contributions even slightly; small increases compound significantly over decades.
• A higher interest rate matters more the longer your time horizon.
• Tax-advantaged accounts (401k, IRA, Roth IRA) let compound growth work without annual tax drag.