Savings Goal Calculator
What Is a Savings Goal Calculator?
A Savings Goal Calculator helps you figure out how much money you need to save regularly to reach your future financial target. Whether you’re saving for a house, education, or retirement, this tool makes it simple to plan how much you should deposit and how long it will take to reach your goal.
You can also explore more tools in our Savings Calculators Collection to compare different saving strategies and interest scenarios.
How Does the Savings Goal Calculator Work?
This calculator uses the future value of a series formula to estimate how much your regular deposits will grow with compound interest:
Future Value (FV) = P × [((1 + r/n)^(n×t) - 1) / (r/n)]
Where:
- FV = Future value or savings goal
- P = Regular deposit amount
- r = Annual interest rate
- n = Number of compounding periods per year
- t = Time in years
By rearranging the formula, you can calculate how much to save per period to reach your goal:
P = FV × (r/n) / [((1 + r/n)^(n×t) - 1)]
This is particularly useful if you want to know how much you must deposit monthly or yearly to reach your goal on time.
Key Inputs Explained
1. Savings Goal
Enter the total amount you want to accumulate, such as $100,000 or even $1,000,000.
2. Saving Period
Specify how long you plan to save — for example, 5 years, 10 years, or 25 years. The calculator uses this to determine how long your deposits will grow.
3. Making Deposits
Choose your deposit frequency — monthly, quarterly, or annually. Regular, smaller deposits often grow faster due to compounding interest.
4. Interest Rate (APY)
Input the annual interest rate offered by your savings account or investment. Even a small difference in rates can significantly affect your total savings.
5. Deposit Timing
Deposits made at the beginning of each period earn slightly more than those made at the end, since they have more time to compound. This calculator assumes deposits are made at the beginning of each period.
6. Compounding Frequency
Most savings accounts compound daily (365 times per year). The more frequent the compounding, the faster your money grows.
Example Calculation
Let’s say you want to save $50,000 in 10 years at an annual interest rate of 5%, compounded daily.
Using the formula above, your required monthly deposit would be about $320 if you make deposits at the beginning of each month.
If you increase your deposit frequency or interest rate, you can reach your savings goal sooner.
You can also check your potential growth rate using the CAGR Calculator to understand your compound annual growth rate.
How Long Will It Take to Save a Million Dollars?
This is one of the most common financial goals. To estimate how long it will take to reach $1,000,000, you can rearrange the formula to solve for time t:
t = [ln((FV × (r/n) + P) / P)] / [n × ln(1 + r/n)]
This tells you how many years it will take based on your savings rate and interest.
For instance, saving $1,000 monthly at 7% interest, compounded monthly, would take around 30 years to reach a million dollars.
If you increase your interest rate through smarter investment or reduce the time horizon, the goal becomes more achievable. Try analyzing potential returns using the Return on Investment Calculator.
Why Use a Savings Goal Calculator?
- It turns vague savings ideas into clear, actionable plans.
- It helps compare different savings rates, compounding options, and deposit schedules.
- It reveals how compound interest accelerates your savings growth.
- It allows you to test multiple scenarios to find the most efficient saving plan.
A Savings Goal Calculator transforms your savings dream into a precise financial plan. By entering just a few details—goal amount, time frame, interest rate, and deposit frequency—you can instantly know what it takes to reach your goal.
To explore more ways to grow your money efficiently, check out our Rule of 72 Calculator to estimate how quickly your savings could double with compound interest.