Bmo Savings Builder Account Calculator

The BMO Savings Builder account is a flexible savings account that allows you to set your own interest rate and withdrawal conditions. This calculator helps you estimate your potential earnings based on your deposit amount, interest rate, and term length.

How the BMO Savings Builder Account Works

The BMO Savings Builder account is designed to give you control over your savings. Here's how it works:

Set Your Own Interest Rate: You can choose from a range of interest rates offered by BMO.
Flexible Withdrawals: You can withdraw your funds at any time without penalties.
No Minimum Balance: There's no requirement to maintain a minimum balance.
Compounding Interest: Interest is calculated and added to your account on a daily basis.

This account is ideal for individuals who want to save money with flexibility and control over their interest rates.

How to Use This Calculator

Using our BMO Savings Builder account calculator is simple. Follow these steps:

Enter the amount you plan to deposit into your account.
Select the interest rate you want to earn.
Choose the term length for your savings (in months).
Click the "Calculate" button to see your estimated earnings.

The calculator will show you your total balance at the end of the term, the total interest earned, and a growth chart.

Formula Used

The calculation is based on compound interest, which is calculated using the following formula:

Compound Interest Formula

A = P × (1 + r/n)^(nt)

Where:

A = the future value of the investment/loan, including interest
P = the principal investment amount (the initial deposit or loan amount)
r = the annual interest rate (decimal)
n = the number of times that interest is compounded per year
t = the time the money is invested or borrowed for, in years

For this calculator, we assume daily compounding (n = 365) and convert the term from months to years.

Worked Example

Let's say you deposit $5,000 into a BMO Savings Builder account with a 2.5% annual interest rate for 24 months (2 years).

Using the formula:

Calculation Steps

1. Convert the term to years: 24 months ÷ 12 = 2 years

2. Convert the interest rate to decimal: 2.5% = 0.025

3. Plug values into the formula: A = 5000 × (1 + 0.025/365)^(365×2)

4. Calculate the exponent: 365 × 2 = 730

5. Calculate the daily rate: 0.025 ÷ 365 ≈ 0.000068493

6. Add 1 to the daily rate: 1 + 0.000068493 ≈ 1.000068493

7. Raise to the power of 730: (1.000068493)^730 ≈ 1.0508

8. Multiply by principal: 5000 × 1.0508 ≈ 5254

Final balance: $5,254.00

Total interest earned: $5,254.00 - $5,000.00 = $254.00

Using our calculator, you would enter $5,000 as the deposit amount, 2.5 as the interest rate, and 24 as the term in months to get the same result.

Frequently Asked Questions

What is the BMO Savings Builder account?

The BMO Savings Builder account is a flexible savings account that allows you to set your own interest rate and withdrawal conditions. It offers daily compounding interest and no minimum balance requirement.

How often is interest calculated?

Interest is calculated and added to your account on a daily basis, which means you earn interest more frequently than with monthly compounding.

Can I withdraw my money anytime?

Yes, you can withdraw your funds at any time without penalties. There are no restrictions on withdrawals.

Is there a minimum balance requirement?

No, there is no minimum balance requirement for the BMO Savings Builder account.

How do I open a BMO Savings Builder account?

You can open a BMO Savings Builder account by visiting a BMO branch, using their online banking platform, or contacting their customer service for assistance.