Savings Calculator (Monthly Contributions)
What a starting amount plus a fixed monthly deposit grows to with compound returns — future value, total contributions and earnings.
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How the Future Value Is Calculated
This calculator adds two separate growth streams. A starting balance compounds on its own as P × (1+r)ⁿ. A stream of equal monthly deposits compounds according to the ordinary annuity formula FV = PMT × [((1+r)ⁿ − 1) ÷ r], where PMT is the fixed monthly deposit, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of months. The tool simply adds the two results together for the combined future value.
Concrete example: depositing 1,000 (in your currency) every month at a monthly rate of 0.5% (roughly a 6% annual rate) for 10 years — 120 months — grows to FV ≈ 163,900, against total contributions of just 120,000. The gap, about 43,900, is money the account earned on its own — interest paid on interest, compounding on deposits that themselves compound. Notice that this roughly 37% bonus over contributions came from a modest, realistic rate — no aggressive assumptions required.
That gap is also where the timing of contributions matters most. The annuity formula's exponent n grows the effect of compounding non-linearly: doubling the time horizon more than doubles the earned interest, because early deposits get far more compounding periods stacked on top of them than late ones. A deposit made in month 1 earns interest for 119 more months; a deposit made in month 119 earns interest for one. This is the concrete, arithmetic version of "starting early is more powerful than saving more" — the same monthly amount produces disproportionately more if the clock starts sooner.
What to Keep in Mind
- The rate you enter should be realistic for the account or investment you actually hold — a savings account, a bond ladder and a stock index fund carry very different long-run rates, and none of them are guaranteed even at their historical average.
- This is a nominal calculation unless you deliberately subtract inflation from the rate first. To see the result in today's purchasing power, use a real rate (nominal rate − inflation rate) instead of the raw nominal rate.
- The formula assumes deposits land at the end of each month and the rate stays constant for the entire period — real accounts often have variable rates, and a deposit at the start of the month instead of the end earns one extra compounding period, a small but real difference over many years.
- Compound growth is symmetric: the same math that grows a deposit stream this fast will also erode a balance this fast if you start withdrawing instead of contributing — useful to remember when planning the decumulation phase after the goal is reached.
Frequently Asked Questions
Why does the same monthly amount produce so much more if I save for longer?
Because interest is compounded on interest — each month's earnings become part of the balance that earns interest the following month, and the effect grows faster than linearly as the number of months increases. Doubling your time horizon roughly quadruples the earned-interest portion of the total, not just doubles it.
What monthly rate should I actually enter?
Convert whatever annual rate you're assuming into a monthly one by dividing by 12 (a 6% annual rate becomes 0.5% monthly) — this calculator, like almost all compound interest formulas, works in the compounding period's own rate, not the annual figure directly.
Does a small starting balance matter if I'm mostly relying on monthly deposits?
It compounds independently and adds up over decades — a modest head start grows at the full compounding rate for the whole period, so even a small initial deposit is worth including rather than waiting to "start properly" once you have more saved.
How do I account for inflation in the result?
Subtract your assumed inflation rate from the nominal return before entering it — a 9% nominal return with 4% inflation becomes roughly a 5% real rate, and the calculator's output at 5% then reflects today's purchasing power rather than future, inflated currency.
What if I miss a few months of deposits?
The formula assumes uninterrupted monthly deposits; gaps simply mean fewer total deposit periods, which you can approximate by running the calculation for the actual number of deposits made rather than the full intended term — the compounding math itself does not change, only the count of contributions feeding it.
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