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How to use this calculator#
- Pick which unknown you are solving for'How long will it take?' takes your deposit and returns a date. 'How much per month?' takes a deadline and returns the standing order. Most people should run both — the second number is often the one that changes behaviour.
- Enter the target and what you already haveOnly count money genuinely ring-fenced for this goal. Including an emergency fund inflates the starting balance and quietly makes one bad month wipe out a target you thought was funded.
- Use a rate you can actually lock inFor anything under five years, use the APY on a savings, notice or term account — not an equity return. A 20% drawdown a month before a house-deposit deadline turns a purchase into a postponement.
- Round the answer up and automate itIf the calculator says $376.19, set the standing order at $400 for the day after payday. The slack absorbs a missed month, and money that leaves before you see it does not compete with anything.
The formula#
Future value of an annuity, solved for the payment
PMT = [ Goal − P(1 + r)ⁿ ] × r ÷ [ (1 + r)ⁿ − 1 ]
- PMT
- Monthly deposit required
- Goal
- Target amount
- P
- Amount already saved
- r
- Monthly rate: annual rate ÷ 12, as a decimal
- n
- Number of months until the deadline
Each month the balance grows by (1 + r) and then the deposit lands — the ordinary-annuity convention. When r = 0 the bracket collapses and PMT is simply (Goal − P) ÷ n. Going the other way, the time to reach a goal is n = ln[(Goal·r + PMT) ÷ (P·r + PMT)] ÷ ln(1 + r).
How the timeline is worked out#
Each month your balance earns one twelfth of the annual rate and then your deposit is added on top. The calculator steps forward month by month until the balance reaches the target. Saving 400 a month on top of 5,000 already banked at 4% reaches a 20,000 goal in about 35 months — interest shaves roughly three months off the 38 it would take with no return at all.
Solving the other direction uses the future value of an annuity: deposit = (target minus your existing balance grown to the deadline) x r / ((1 + r)^n - 1), where r is the monthly rate and n the number of months. That single figure is what you set up as a standing order the day after payday.
Choosing a rate you can actually get#
For a goal under two years, use a rate you can genuinely lock in — a high-yield savings account, notice account or term deposit, commonly 3-5% depending on your country and central bank policy. For anything inside five years, resist plugging in equity-market returns: a 20% drawdown a month before your deadline turns a house deposit into a postponement.
Making the plan survive contact with real life#
Automate the transfer so the money leaves before it can be spent, and round the required deposit up to a memorable number to build slack. Keep goals in separately named accounts — a deposit fund, an emergency buffer of three to six months of expenses, a holiday pot — so a good month for one is not quietly funded by raiding another.
Worked examples#
How long $400 a month takes
$5,000 already saved, $400 added monthly at 4%, aiming for $20,000.
- Monthly rate r = 0.04 ÷ 12 = 0.00333333
- Month 1: 5,000 × 1.00333333 + 400 = 5,416.67
- Month 2: 5,416.67 × 1.00333333 + 400 = 5,834.72
- Month 3: 5,834.72 × 1.00333333 + 400 = 6,254.17
- Continue until the balance first exceeds 20,000 — that happens at month 35, at 20,440.85
- Deposited over that time: 400 × 35 = 14,000; interest earned = 1,440.85
35 months, or 2 years 11 months. At 0% interest the same plan takes 38 months, so the return buys back three months.
Working backwards from a deadline
A $30,000 house deposit needed in 48 months, with $8,000 saved and a 4.5% account.
- r = 0.045 ÷ 12 = 0.00375; n = 48
- Existing savings grow to 8,000 × 1.00375⁴⁸ = 9,574.52
- Still needed from deposits: 30,000 − 9,574.52 = 20,425.48
- Annuity factor = (1.00375⁴⁸ − 1) ÷ 0.00375 = 52.4838
- PMT = 20,425.48 ÷ 52.4838 = 389.18
$389.18 a month. At 0% interest the same deadline would demand $458.33, so the account is doing $69 a month of the work for you.
Reference tables#
| Rate | 1 year | 2 years | 3 years | 5 years | 10 years |
|---|---|---|---|---|---|
| 0% | $1,666.67 | $833.33 | $555.56 | $333.33 | $166.67 |
| 2% | $1,651.44 | $817.47 | $539.52 | $317.22 | $150.69 |
| 3% | $1,643.87 | $809.62 | $531.62 | $309.37 | $143.12 |
| 4% | $1,636.33 | $801.83 | $523.81 | $301.66 | $135.82 |
| 5% | $1,628.82 | $794.09 | $516.08 | $294.09 | $128.80 |
Over one year the rate barely matters — 5% saves $38 a month. Over ten years it saves $38 a month too, but that is 23% of the whole deposit. Interest earns its keep on long goals, not short ones.
| Target | Months | In years | Interest earned |
|---|---|---|---|
| $10,000 | 12 | 1 yr 0 mo | $292.69 |
| $20,000 | 35 | 2 yr 11 mo | $1,440.85 |
| $30,000 | 55 | 4 yr 7 mo | $3,106.07 |
| $50,000 | 93 | 7 yr 9 mo | $8,140.30 |
| $100,000 | 170 | 14 yr 2 mo | $27,090.33 |
Doubling the target from $50,000 to $100,000 adds only 77 more months, not another 93 — past the seven-year mark interest starts carrying a meaningful share of the load.
| Months saving | Total deposited | Balance at 0% | Balance at 4% | Interest earned |
|---|---|---|---|---|
| 12 | $3,600 | $3,600.00 | $3,666.74 | $66.74 |
| 36 | $10,800 | $10,800.00 | $11,454.47 | $654.47 |
| 60 | $18,000 | $18,000.00 | $19,889.69 | $1,889.69 |
| 120 | $36,000 | $36,000.00 | $44,174.94 | $8,174.94 |
| 240 | $72,000 | $72,000.00 | $110,032.39 | $38,032.39 |
At one year the account adds 1.9% to the pot. At twenty years it adds 52.8%. This is the strongest argument there is for opening the goal early rather than optimising the rate.
Common mistakes#
- Counting the emergency fund towards the goalThree to six months of expenses exists to be spent on surprises. Counting it in the starting balance means one boiler replacement resets a plan you believed was on schedule — and you will now be raiding the goal to rebuild the buffer.
- Entering an equity return on a three-year goalPlugging 8% into a 36-month, $20,000 house-deposit plan lowers the required deposit from $523.81 to $493.39 — $30 a month — while exposing the whole pot to a drawdown that has historically taken years to recover. The saving is trivial; the risk is not.
- Using the headline rate on an introductory accountMany high-yield accounts pay a bonus rate for 12 months, then drop sharply. If your goal is longer than the bonus period, model the underlying rate — or diarise the switch on the day the bonus expires.
- Forgetting tax on the interestInterest is taxable income in most countries unless the account is sheltered — an ISA, a TFSA, or below a personal savings allowance. Enter an after-tax rate if you need the timeline to be reliable rather than optimistic.
Frequently asked questions#
Should I count my emergency fund towards a goal?
Keep them separate. An emergency fund exists to be spent on surprises, so counting it twice means one bad month wipes out a goal you believed was funded.
What rate should I enter for a savings account?
Use the account's current annual percentage yield. If the rate is variable, entering a slightly conservative figure keeps the timeline honest when rates fall.
Does this account for tax on interest?
No. Interest may be taxable depending on your country and account type. Enter an after-tax rate if you want a deliberately conservative projection.
Key terms#
- APY (annual percentage yield)
- The rate an account actually pays once its compounding frequency is counted. It is the right figure to enter here, not the nominal rate.
- Sinking fund
- Money set aside monthly for a known future expense — a car replacement, an annual insurance premium — so it never becomes a debt.
- Emergency fund
- Three to six months of essential expenses held in instant access, kept deliberately separate from every goal so a surprise never derails a plan.
- Standing order
- An automatic recurring transfer you control, ideally dated the day after payday so saving happens before spending.
- Notice account
- A savings account paying a higher rate in exchange for 30–120 days' warning before withdrawal. Useful for goals with a known date, wrong for an emergency fund.
Sources#
- Savings Fitness and goal-setting guidance — U.S. Department of Labor, Employee Benefits Security Administration
- An essential guide to building an emergency fund — Consumer Financial Protection Bureau
- National rates and rate caps on deposit accounts — Federal Deposit Insurance Corporation
Figures last checked .
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