Simple Savings Calculator
Calculate how your savings grow over time with compound interest. This calculator shows the power of regular deposits and compounding returns on your savings.
Time & Interest
Compounding Frequency
Savings Summary
Initial Investment:
$0.00
Total Deposits:
$0.00
Final Amount:
$0.00
Interest Earned
Total Interest:
$0.00
Interest Percentage:
0.00%
Annual Yield:
0.00%
Growth Breakdown
Principal Growth:
$0.00
Compound Effect:
$0.00
Monthly Contribution:
$0.00
Understanding Compound Interest
Compound interest is the interest you earn on both your original money and the interest you accumulate over time. It's often called "interest on interest" and is one of the most powerful forces in personal finance.
How Compound Interest Works
A = P(1 + r/n)^(nt) + PMT
Where A = Final Amount, P = Principal, r = Rate, n = Compounds per year, t = Time, PMT = Regular deposits
Key Components:
- Principal: Your initial investment
- Interest Rate: Annual percentage yield
- Compounding: How often interest is added
- Time: How long money is invested
- Regular Deposits: Additional contributions
Compounding Frequencies:
- Daily: Most frequent compounding
- Monthly: Common for savings accounts
- Quarterly: Some CDs and bonds
- Annually: Least frequent compounding
The Power of Time
Starting Early Advantage
$10,000 invested at age 25 vs age 35:
- Age 25: $69,161 at age 65
- Age 35: $36,136 at age 65
- Difference: $33,025 more
- Time advantage: 10 extra years
Regular Contributions
$200/month for 30 years at 7%:
- Total Deposits: $72,000
- Interest Earned: $128,000
- Final Amount: $200,000
- 64% from interest alone
Savings Account Types
| Account Type | Typical APY | Best For | Liquidity |
|---|---|---|---|
| High-Yield Savings | 4-5% | Emergency funds | High |
| Money Market | 4-5% | Short-term goals | High |
| CDs (1-5 years) | 4.5-5.5% | Fixed time horizons | Low |
| Bonds | 3-5% | Income generation | Medium |
Maximizing Compound Interest
Increase Contributions:
- Save more each month
- Automate transfers
- Use windfalls wisely
- Increase with raises
Optimize Returns:
- Shop for high rates
- Consider online banks
- Use credit union accounts
- Monitor rate changes
Common Compounding Mistakes
Avoid These:
- Withdrawing earnings
- Keeping money in low-interest accounts
- Not starting early enough
- Missing regular contributions
Do These Instead:
- Let interest compound
- Seek higher yields
- Start saving immediately
- Automate contributions
Real-World Examples
Compound Interest in Action
College Savings:
- $100/month for 18 years
- 6% annual return
- Total deposits: $21,600
- Final amount: $41,000
- 90% growth from interest
Retirement Savings:
- $500/month for 35 years
- 7% annual return
- Total deposits: $210,000
- Final amount: $680,000
- 224% growth from interest
Key Takeaways for Compound Interest
- Compound interest is interest earned on both principal and accumulated interest
- Time is the most important factor - start saving as early as possible
- Regular contributions significantly boost your final savings amount
- Higher interest rates and more frequent compounding accelerate growth
- Even small amounts saved consistently can grow substantially over time
- Avoid withdrawing earnings to maintain the compounding effect
- Shop around for the highest available interest rates
- Automate your savings to ensure consistent contributions