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Business finance / Savings Calculator

Savings Calculator

Work out how much to save each month to reach a savings goal by a set month, or how long your monthly deposit takes to get there. It works for a personal emergency fund and for a business cash reserve; interest is added at the APY your bank quotes.
$

Enter a number of at least 0

Example: a cash reserve of about three months of business expenses, or a personal emergency fund.

$

Enter a number of at least 0

%

Enter a number from 0 to 50%

Example rate. Copy the APY from your bank's savings offer; the calculator does not supply rates.

Whole number, 1–600

Count the months from now to your target date, e.g. 24 for two years.

Save each month for 2 years
$715.61
$17,174.64your deposits
$825.58interest earned
$20,000.22balance at the end
$0goal $20,000.00
  • Saved so far
  • Monthly deposits
  • Interest
Saved so far$2,000.00
Monthly rate · (1 + APY)^(1/12) − 10.3274%
Year 1 · saved $10,587.32 · interest $236.32$10,823.64
Year 2 · saved $19,174.64 · interest $825.58$20,000.22
Monthly deposit × 24$17,174.64
Balance after 2 years$20,000.22

Set up an automatic transfer of $715.61 a month. Interest covers $825.58 of the $20,000.00.

See breakdown

How the savings calculation works

  1. Pick what you want to know

    Choose “How much to save each month” if you have a target date, or “How long my deposit takes” if you already know what you can put away.

  2. Enter the goal, what you have and the APY

    The APY is turned into a monthly rate: (1 + APY)^(1/12) − 1. At a 4.00% APY that is 0.3274% a month.

  3. Monthly saving = (goal − start × g) × i ÷ (g − 1)

    Here i is the monthly rate, n the months and g = (1 + i)^n. Deposits go in at the end of each month, and the result is rounded up to the next cent so the goal is met.

  4. Time to goal is run month by month

    Each month the balance earns interest and then takes the deposit, until it reaches the goal. The year-by-year rows show deposits and interest so far.

Worked example. A shop owner wants a $20,000 cash reserve in 24 months and already has $2,000 in a savings account paying a 4.00% APY. She needs to save $715.61 a month: $17,174.64 of deposits plus $825.58 of interest takes the balance to $20,000.22. Saving $700 a month instead gets there in 2 years 1 month.

Savings FAQ

How much should I save each month to reach my goal?

Take the goal, subtract what your current savings will grow to, and spread the rest over the months you have, allowing for interest. To reach $20,000 in 24 months from $2,000 at a 4.00% APY you need $715.61 a month; without interest it would be $750.00.

How is interest on a savings account calculated?

Banks pay interest on the daily or monthly balance and must quote the yearly result as an APY. This calculator converts the APY into a monthly rate and adds it to the balance each month before the new deposit.

What APY should I use?

Use the APY your bank shows for the account you will actually use. Savings rates change often, so the calculator does not suggest one; try a lower rate too to see how much the plan depends on it.

How big should a business cash reserve be?

A common rule of thumb is three to six months of operating expenses, more for a seasonal business. Add up rent, payroll, loan payments and other fixed bills for one month, multiply, and enter that as the goal.

How long will it take to save $10,000?

Switch to “How long my deposit takes”, set the goal to $10,000 and enter your monthly deposit. From zero at $500 a month and a 4.00% APY it takes 1 year 8 months; at $250 a month, 3 years 2 months.

Is interest on savings taxable?

Yes. Interest is taxable income in the year it is credited, and the bank reports it on Form 1099-INT. The calculator shows interest before tax.

Sources: CFPB: Regulation DD (Truth in Savings), APY rules

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