How does monthly compounding help me reach my goal faster?
Interest compounds monthly, so you earn interest on both your deposits and previously earned interest. The earlier you start and the more you save monthly, the faster your balance accelerates toward the goal.
How much should I save each month?
A common rule is 15–20% of your income toward long-term savings. Use this calculator's monthly-contribution estimate by entering your goal, timeline, and expected return to find the exact amount for your situation.
What return should I assume for savings?
High-yield savings accounts and CDs currently pay around 3–5%. Broad stock-market index funds have historically returned 7–10% per year before inflation, but they carry risk. Use a conservative figure if the goal is short-term.
What's the difference between this and a compound interest calculator?
A plain compound interest calculator projects a single lump sum growing. This savings goal calculator also includes regular monthly contributions, so it is designed for building toward a specific target.
Should I count inflation against my savings goal?
Yes, for goals more than a few years away. Saving $20,000 for a car today buys more car than $20,000 of savings ten years from now. Consider inflating your target amount before calculating.
What happens if I miss a contribution month?
Missing a contribution simply delays the goal by roughly that month, plus a small amount of lost compounding interest. Consistent, automatic contributions are the surest way to stay on schedule.