How long will it take to reach my savings goal?
At $500 a month and an example 4% APY, starting from nothing, $25,000 takes 3 yrs 11 mos. Doubling the deposit to $1,000 cuts that to 2 yrs 1 mo. Find your goal in the left column and your deposit along the top.
| Goal | $100/mo | $250/mo | $500/mo | $1,000/mo |
|---|---|---|---|---|
| $5,000 | 3 yrs 11 mos | 1 yr 8 mos | 10 mos | 5 mos |
| $10,000 | 7 yrs 3 mos | 3 yrs 2 mos | 1 yr 8 mos | 10 mos |
| $25,000 | 15 yrs 3 mos | 7 yrs 3 mos | 3 yrs 11 mos | 2 yrs 1 mo |
| $50,000 | 24 yrs 9 mos | 12 yrs 11 mos | 7 yrs 3 mos | 3 yrs 11 mos |
| $100,000 | 37 yrs 1 mo | 21 yrs 5 mos | 12 yrs 11 mos | 7 yrs 3 mos |
Already have money saved? Enter it as your starting balance. A $5,000 starting balance cuts the $25,000 goal at $500 a month to 3 yrs 1 mo.
How much do I need to save each month?
Divide the goal by the number of months, then trim a little for interest. On short deadlines, interest barely helps: $10,000 in one year takes $818 a month, only $15 less than saving with no interest at all. Over 10 years, interest covers much more of the goal.
| Goal | 1 year | 2 years | 3 years | 5 years | 10 years |
|---|---|---|---|---|---|
| $5,000 | $409 | $201 | $131 | $76 | $34 |
| $10,000 | $818 | $401 | $262 | $151 | $68 |
| $25,000 | $2,046 | $1,003 | $655 | $378 | $170 |
| $50,000 | $4,092 | $2,006 | $1,311 | $756 | $341 |
| $100,000 | $8,184 | $4,012 | $2,622 | $1,511 | $682 |
If the number doesn't fit, the budget calculator can show where that money might come from. The other choice is a longer deadline, and the table shows what each extra year is worth.
APY vs. APR vs. interest rate: which number goes here?
Enter the APY. Federal rules define APY as a percentage rate reflecting the total interest paid on an account, including compounding over a 365-day period. That makes it the fair way to compare savings accounts. Banks must disclose it, and you can ignore how often they compound.
A 4% APY with monthly compounding comes from a stated rate of about 3.93%. On $10,000 over a year, that's $400 of interest, not the $393 the stated rate alone would suggest. Enter the stated rate here and you'd understate your interest slightly.
APR belongs to loans. When a page advertises APR on a deposit product, ask for the APY before you compare. One more trap: APY isn't a promise. In a variable-rate account, the rate can change after you open it. The calculator holds your APY steady, so rerun it when your rate moves.
Is a higher APY or a bigger deposit worth more?
On short goals, the deposit wins. Over decades, the rate catches up. This table starts with $5,000 and $400 a month, then compares two changes: earning 4% rather than 0.4%, and adding $100 a month at 4%.
| Years | Balance at 0.4% | Moving to 4% adds | $100 more a month adds |
|---|---|---|---|
| 1 | $9,829 | $259 | $1,222 |
| 3 | $19,544 | $1,336 | $3,814 |
| 5 | $29,338 | $3,217 | $6,618 |
| 10 | $54,166 | $11,913 | $14,670 |
| 20 | $105,335 | $51,157 | $36,384 |
Moving money to a higher-rate account is still worth a few minutes of your time. Before you chase a rate, check for monthly fees, balance minimums, and whether a teaser rate expires. A fee can wipe out the gain on a small balance.
Is my savings insured? FDIC basics
Yes, if it's in a deposit account at an FDIC-insured bank, up to $250,000 per depositor, per bank, per ownership category. You don't need to apply. The FDIC says no depositor has lost a penny of FDIC-insured funds since it was founded in 1933.
- Covered: checking, savings, money market deposit accounts, and CDs.
- Not covered: stocks, bonds, mutual funds, annuities, life insurance, crypto assets, and safe deposit box contents.
- Interest counts toward the limit. $245,000 earning 4% APY becomes $254,800 in a year, which is $4,800 over a $250,000 limit in the same category.
- Credit unions have similar federal coverage through the NCUA, but some state-chartered credit unions use private insurers that aren't backed by the U.S. government. Check before you deposit.
Joint accounts are a separate category from single accounts, so coverage can exceed $250,000 at one bank. The FDIC's free EDIE estimator works out your exact coverage.
What will my savings be worth after tax and inflation?
Less than the APY suggests. The IRS taxes interest on savings accounts, money market accounts, and CDs in the year it becomes available to you. Payers should send a Form 1099-INT for $10 or more, but you must report all your interest even with no form.
Say you're in a 22% bracket and inflation runs 2.5%, both used here as examples. A 4% APY becomes 3.12% after tax and about 0.6% after inflation. So $32,555 in 5 years becomes $31,739 after tax, with the buying power of $28,052 today. Enter both under More options to see your own figures.
That doesn't make saving pointless. A savings account is there for safety and easy access. Money you'll need soon, like an emergency fund or a down payment, is often kept where it can't fall in value. For money you won't need for decades, look at the investment calculator to see the trade-off.
Should I save or pay off debt first?
Compare the rates. $5,000 at a 4% APY earns $200 in a year. The same amount owed on a card at an example 22% costs about $1,100, a $900 gap. A common rule of thumb is to keep a small cushion for surprises, then pay down high-rate debt before building more savings. The debt payoff calculator runs that plan. If debt feels out of reach, a nonprofit credit counselor can review your options with you.
Common questions
How much interest does $10,000 earn in a savings account?
At a 4% APY, about $400 in a year, before tax. APY tells you this directly: multiply the balance by the APY. At 0.4% APY, the same balance earns $40.
How much do I need to save per day?
Take the monthly figure, multiply by 12, and divide by 365. Reaching $10,000 in a year at 4% APY takes about $26.91 a day. A monthly or per-paycheck automatic transfer gets you to the same place with less effort.
Can this show withdrawals or how long my savings will last?
No. It only models deposits and interest. To see how long a balance lasts while you spend from it, use the retirement calculator.
When does the calculator assume I deposit?
At the end of each month, every month, at the same amount. Real results will differ a little if your deposits land at other times or you skip one.
Can I use this for college savings?
Yes, for the arithmetic. Try the College in 18 years preset. But an 18-year horizon may tempt you to use a savings rate that won't hold that long, so test a lower APY too, and remember that tuition may rise over that time.
Sources
- Deposit insurance · Federal Deposit Insurance Corporation
- Deposit insurance FAQs · Federal Deposit Insurance Corporation
- Understanding deposit insurance · Federal Deposit Insurance Corporation
- Share insurance coverage · National Credit Union Administration
- Regulation DD § 1030.2: definitions of annual percentage yield and variable-rate account · Consumer Financial Protection Bureau
- Topic no. 403: Interest received · Internal Revenue Service