Bankrate Save Money Calculator
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Reviewed by Calculator Editorial Team
Use the Bankrate Save Money Calculator to estimate how much you can save over time with consistent monthly contributions. This tool helps you plan your savings goals by projecting future balances based on your current savings rate and interest earned.
How to Use This Calculator
To use the Bankrate Save Money Calculator:
- Enter your current savings balance in the "Current Savings" field.
- Input your monthly savings amount in the "Monthly Savings" field.
- Select the annual interest rate you expect to earn on your savings.
- Choose the time period you want to project (in years).
- Click "Calculate" to see your projected savings.
The calculator will display your projected savings balance at the end of the selected period, along with a chart showing your savings growth over time.
Formula Used
The Bankrate Save Money Calculator uses the future value of an annuity formula to calculate your projected savings:
Future Value (FV) = P × (1 + r)^n + PMT × [(1 + r)^n - 1] / r
Where:
- FV = Future Value of savings
- P = Current savings balance
- PMT = Monthly savings amount
- r = Annual interest rate (as a decimal)
- n = Number of years
This formula accounts for both the growth of your initial savings and the future value of your regular monthly contributions.
Worked Example
Let's say you have $5,000 in savings, plan to save $200 per month, and expect a 4% annual interest rate. Here's how the calculation works for a 5-year period:
Current Savings: $5,000
Monthly Savings: $200
Annual Interest Rate: 4%
Time Period: 5 years
Projected Savings: $13,200.48
This example shows how your savings grow over time with regular contributions and earned interest.
Interpreting Results
The calculator provides several key pieces of information:
- Projected Savings Balance: The total amount you'll have after the selected period.
- Total Interest Earned: The amount of interest accumulated from your savings.
- Savings Growth Chart: A visual representation of your savings over time.
Use these results to:
- Assess your progress toward financial goals
- Adjust your savings strategy if needed
- Plan for future expenses or investments
Frequently Asked Questions
How accurate is the Bankrate Save Money Calculator?
The calculator provides an estimate based on the inputs you provide. Actual results may vary depending on market conditions and other factors.
Can I use this calculator for retirement planning?
Yes, the calculator can help estimate retirement savings potential. However, it's recommended to consult with a financial advisor for comprehensive retirement planning.
What if I change my savings amount during the period?
The calculator assumes consistent monthly savings. If you plan to adjust your savings amount, you may need to run multiple calculations or use a more advanced financial tool.
Is the interest rate compounded monthly or annually?
The calculator uses the annual interest rate you enter, assuming it's compounded annually. For more precise calculations, you might need a tool that supports different compounding frequencies.