Skip to content
TrueScalers

Savings goal calculator

A savings goal calculator finds the monthly deposit required to reach a target by a chosen date, solving the annuity formula for the payment: PMT = (FV − P(1+r)ⁿ) × r ÷ ((1+r)ⁿ − 1). Reaching $50,000 in 5 years from $5,000 saved, at 4% interest, requires depositing $661.34 every month.

$
$
%
years
Calculated in your browser — nothing is uploaded.

Result

Monthly deposit needed

$662.08

PMT = (FV − P(1+r)ⁿ) × r ÷ ((1+r)ⁿ − 1)

Total deposited
$39,725
Interest earned
$5,275
Number of deposits
60

Reaching $50,000 in 5 years from a starting balance of $5,000 at 4.00% requires depositing $662.08 per month for 60 months.

How to use the savings goal calculator

  1. 01

    Enter your target

    Type the total amount you want to have saved — a house deposit, an emergency fund, or a tuition bill.

  2. 02

    Enter what you have already

    Type the current balance. This amount earns interest for the whole period and reduces the deposits required.

  3. 03

    Enter the interest rate

    Type the annual rate the account pays. Use the APY quoted by the bank, not a promotional introductory rate that expires.

  4. 04

    Set the timeframe

    Type how many years you have. Quarter-year steps allow targets such as 18 months or 2 years 9 months.

  5. 05

    Adjust until affordable

    If the required deposit is too high, extend the timeframe or lower the target and watch the monthly figure fall.

The formula

PMT = (FV − P(1 + r)ⁿ) × r ÷ ((1 + r)ⁿ − 1)
PMT
The deposit required at the end of each month.
FV
The savings target — the future value you want to reach.
P
The balance already saved today.
r
The monthly interest rate: the annual rate divided by 100, then by 12.
n
The number of monthly deposits, equal to the years multiplied by 12.

The term P(1 + r)ⁿ is what the existing balance grows to on its own. Subtracting it from the target leaves the shortfall the deposits must cover. If the existing balance alone already exceeds the target, no further deposits are required.

Worked example

Savings goal
$50,000
Already saved
$5,000
Annual interest rate
4%
Timeframe
5 years
Result
$661.34 per month

The monthly rate r is 4 ÷ 100 ÷ 12 = 0.00333333, and n is 60 months. The existing $5,000 grows on its own to 5,000 × (1.00333333)^60 = $6,104.98. The shortfall the deposits must cover is $50,000 − $6,104.98 = $43,895.02. Solving the annuity formula: PMT = 43,895.02 × 0.00333333 ÷ ((1.00333333)^60 − 1) = 43,895.02 × 0.00333333 ÷ 0.220997 = $661.34. Total deposited across 60 months is $39,680, and interest supplies the remaining $5,320.

Frequently asked questions

How much should an emergency fund hold?

The common guidance is three to six months of essential expenses, held in an instant-access account. Households with variable income, a single earner, or specialised employment usually target the upper end or beyond. The figure that matters is essential outgoings — housing, food, utilities, insurance, minimum debt payments — not total spending.

Does the interest rate matter much over short periods?

Less than most savers expect. Reaching $50,000 in five years from $5,000 requires $661.34 a month at 4% and $698.42 a month at 1%. The difference is $37 a month, or 5.6%. Over longer horizons the rate dominates: across 25 years, compounding contributes more to the balance than the deposits do.

Should savings go into a high-yield savings account or investments?

Horizon determines the answer. Money needed within five years generally belongs in a high-yield savings account, money-market fund or certificate of deposit, where the balance is not at risk. Money not needed for a decade or more has historically fared better in diversified equities, which are volatile year to year but higher-returning across decades.

Are savings deposits protected if the bank fails?

In the United States, the FDIC insures deposits up to $250,000 per depositor, per insured bank, per ownership category; the NCUA provides equivalent cover at credit unions. In the United Kingdom, the FSCS covers £85,000 per person per authorised firm. Balances above those limits are best spread across separate institutions.

What does paying yourself first mean?

Paying yourself first means scheduling an automatic transfer to savings on payday, before discretionary spending. Automation removes the monthly decision, which is where saving plans usually fail. Setting the standing order for the day after payday, rather than the end of the month, is measurably more effective at keeping the deposit intact.

Does this calculator account for tax on interest?

No. Results are pre-tax. Interest earned in an ordinary savings account is generally taxable as income in the year received. To approximate the after-tax outcome, reduce the entered rate by your marginal tax rate — a 4% rate for a saver in a 24% bracket behaves like roughly 3.04%.

Sources

Last reviewed: · Formula and sources verified by Syed Aqeel Ahmad Gillani. See the methodology for how every calculation is derived.

Related tools