Savings Goal Calculator
Work out the monthly deposit needed to reach a savings target in a set number of months, including interest on the balance.
Updated Formula covered by automated tests
Most savings targets come with a date attached: a house deposit by next spring, a wedding in 18 months, a car before the old one gives out, or an emergency fund before a planned job change. This tool turns that target and date into a single monthly figure. Enter the amount you want, what you already have set aside, the number of months you have and the interest rate your savings account pays, and it tells you how much to transfer each month.
It also shows how much of the final balance will be your own deposits and how much will come from interest, which helps you judge whether moving the money to a higher-yield account is worth the effort. For short goals the interest is usually a small share and the monthly deposit does almost all the work; the longer the timeframe, the more the rate starts to matter.
The formula
- D
- Amount to deposit at the end of every month
- G
- Savings goal in dollars
- S
- Amount already saved today
- i
- Monthly interest rate as a decimal, from a nominal annual rate compounded monthly
- m
- Number of months until the deadline
The goal is reached when what you have now, grown for m months, plus the future value of the monthly deposits equals G. The first part is S × (1 + i)^m. The deposits form an ordinary annuity whose future value is D × ((1 + i)^m − 1) ÷ i. Solving that equation for D gives the formula above; it is the same relationship used for sinking funds in accounting.
If your existing balance would grow past the goal on interest alone, no deposits are needed and the tool says so. With no interest the formula reduces to splitting the remaining gap evenly across the months.
Worked example
Marcus wants $10,000 for a used car in 24 months. He already has $2,000 in a high-yield savings account paying 4% a year, compounded monthly.
- 1 Monthly rate: 0.04 ÷ 12 = 0.0033333. Growth over 24 months: (1.0033333)²⁴ = 1.08314.
- 2 His $2,000 alone grows to 2,000 × 1.08314 = $2,166.29, leaving 10,000 − 2,166.29 = $7,833.71 to come from deposits.
- 3 Annuity factor: (1.08314 − 1) ÷ 0.0033333 = 24.9429.
- 4 Monthly deposit: 7,833.71 ÷ 24.9429 = $314.07.
- 5 Deposits total 314.07 × 24 = $7,537.59, so interest contributes 10,000 − 2,000 − 7,537.59 = $462.41.
Result: Marcus needs to save $314.07 a month. Without interest he would need $333.33, so the 4% account saves him about $19 a month.
Before you rely on the result
- Assumes a constant rate, deposits on the last day of each month and interest compounded monthly. Deposits early in the month would earn slightly more.
- Ignores tax on interest and inflation, which raises the cost of goals like a car or a home over time.
Frequently asked questions
How big should an emergency fund be?
A common guideline is three to six months of essential expenses, with more if your income is irregular, you are the only earner or you work in a field where job searches take a long time. Set G to your monthly essential spending times the number of months you are aiming for.
What if the monthly amount is more than I can afford?
You have three levers: extend the deadline, lower the target, or raise the starting balance with a one-off sum such as a tax refund. Try each in the tool; adding months usually makes the biggest difference because the deposit falls roughly in proportion to the time available.
Is it worth investing the money instead of keeping it in savings?
For goals a few years away, most people keep the money in insured savings, money market accounts or CDs, because a fall in stock prices just before the deadline could leave you short. Investing makes more sense for goals many years out. A fee-only financial planner can help you match the account to the timeframe.
Does my savings rate stay fixed?
Rates on ordinary savings accounts are variable and banks can change them at any time. A certificate of deposit locks the rate in but may charge a penalty for early withdrawal. Rerun the calculation when your rate changes.
Sources
- Consumer Financial Protection Bureau: An essential guide to building an emergency fund (consumerfinance.gov)
- FDIC: Deposit insurance (fdic.gov)