This is where a simple savings calculator like this one can come in handy. For example, you will likely need to save more money for a down payment than you would for a vacation. How much you should save depends greatly on your financial situation and goals. This sets a time limit to your savings on the savings calculator and allows you to see how much you will have to contribute regularly to meet your goal. For example, if you have five years to save for a new home, you can enter five years into the calculator. In that case, you can set a time limit to your savings. Savings accounts can also be used to save toward tangible goals, like a home down payment, a car or a vacation. This is often what financial experts mean when they encourage people to have an emergency fund. Savings accounts can be used as a financial safety net. Years to Save: Meeting Your Financial Goals You may also be able to unlock a higher interest rate by linking a checking account from the same institution to your savings account. Often you can do this by having a higher account balance. It’s a good idea to check to see whether there are ways you can increase an account’s interest rates. This allows credit unions to take the money coming in and turn it around as favorable interest rates. Plus, a credit union serves only its members (customers) without making a profit for the company itself. Credit unions, while they do have physical locations, often have fewer locations than a big bank, cutting back on those costs. Online banks tend to offer much better rates due to the lack of physical locations and the costs that come with maintaining them. To find the best rates in the industry, it can help to look at online banks and credit unions.
They may offer other features that make them appealing for you like easy access to ATMs and physical branch locations. In fact, many big banks like Chase and Bank of America have relatively low rates on their savings accounts. Interest rates in general have been rising, but you won’t find high savings interest rates at every financial institution. It’s important to know that interest rates can vary quite a bit by banking institution. This is what can really add to your money’s growth over time. The more often interest is compounded, the more interest you’ll earn. Compound interest essentially means that your interest earns interest. You will also have to specify whether the account compounds interest daily, monthly, quarterly, semiannually or annually. You can find an account’s rate on SmartAsset's savings account comparison page. You’ll enter this number into the calculator to see the rate at which your initial deposit and any other potential contributions grow. Of course a big part of your savings growth is your specific account’s annual interest rate (APR). Annual Interest Rate and Compounding Period: Account Specifics Entering your recurring monthly deposits into the savings calculator will give you a look at how these deposits can boost your returns.
Not only are you setting aside more money, but you also add to the principal that accrues interest. Additional Contributions: Ongoing SavingsĪlthough not required, making additional contributions into your savings account will help your savings grow faster. Making a larger deposit does allow your money to grow more than, say, a $50 original deposit. You can deposit as much or as little as you want into the calculator but beware that some savings accounts have minimum deposit requirements. You’ll enter this number into the calculator as your starting point. Your starting savings balance is the initial, or principal, amount you deposit into your account. Starting Savings Balance: The Initial Deposit
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To find a financial advisor who serves your area, try our free online matching tool. Whether you are building up an emergency fund or saving for a specific goal, a savings calculator can help you see what you need to do in order to get there.Ī financial advisor can help you incorporate your savings into your financial plan. You can set a specific financial goal and see how much you need to contribute each month to reach it or you can set how much money you are able to afford to contribute each month and then see how long it will take you to get there. It can also help you determine how much money to deposit, whether to make monthly deposits and more. This will help you make a more informed decision on which savings account you might want to open. You can easily change the interest rates, deposits, frequency of interest compounding and the number of years you have to save. It can help you compare and contrast your potential savings for different scenarios. Using a savings calculator allows you to see how fast your money will grow when put in an interest-earning account.
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