RightFiguresDeposits, then the balance
This page projects savings when you add the same amount every month. It is not the compound interest calculator, which grows one starting amount and does not take contributions.
Each month does two things, in this order:
- Credit interest on the balance at the start of the month. The monthly rate is the annual rate divided by 12. That interest rounds half up to the nearest cent.
- Add the monthly contribution after the interest. The contribution earns nothing until later months.
Total contributions are the monthly amount times the number of months. The starting balance is not a contribution. Interest is the ending balance minus the starting balance minus those contributions.
Investor.gov’s compound interest calculator can combine an initial amount with regular additions, and its savings goal calculator works toward a target. Those tools do not have to use this cent-by-cent timing. The Consumer Financial Protection Bureau’s emergency-fund guide is about why to save, not this ledger.
A $1,000 example
Start with $1,000.00, add $200.00 at the end of each month, and earn 4% for 5 years (60 months).
The ending balance is $14,480.75. Contributions are $12,000.00. Interest earned is $1,480.75. The starting balance is still $1,000.00.
At 0%, the same deposits add $4,800.00 over two years to a $1,000.00 start, and the ending balance is $5,800.00 with $0.00 of interest. A $0.00 start is allowed when the monthly contribution is greater than zero. Both amounts at zero are rejected, because there is nothing to project.
What this leaves out
The rate and the contribution do not change. There are no withdrawals, market ups and downs, fees, taxes or inflation. A result above $100,000,000,000.00 is rejected. For a lump sum with annual, quarterly or daily compounding, use the compound interest calculator. For a borrowed amount, use the loan payment calculator.
Frequently asked questions
When is the deposit added?
After that month’s interest. A deposit made on the last day of the month does
not earn interest until the following month.
Why might this differ from a bank’s projection?
Banks can use a daily balance, a different day count, or rounding that is not
half up to the cent each month. This page always uses the annual rate divided
by 12 and a monthly cent ledger.
Are the deposits and rate sent to analytics?
No. Analytics may record that this calculator ran. The amounts and the rate
stay in the browser.
Sources & review
- Compound interest calculator — U.S. Securities and Exchange Commission, Investor.gov
- Savings goal calculator — U.S. Securities and Exchange Commission, Investor.gov
- An essential guide to building an emergency fund — Consumer Financial Protection Bureau
Last reviewed: . The formula is reproduced above so you can check the math independently.
Educational estimate only. An account statement can credit interest on a different schedule.