Savings Account Earnings Calculator
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Reviewed by Calculator Editorial Team
This savings account earnings calculator helps you estimate how much interest you'll earn on your savings over time. Simply enter your initial deposit, annual interest rate, and time period to see your projected earnings.
How to Use This Calculator
Using our savings account earnings calculator is simple:
- Enter your initial deposit amount in dollars.
- Input your annual interest rate (APR).
- Select whether the interest is compounded annually, semi-annually, quarterly, or monthly.
- Enter the number of years you plan to save.
- Click "Calculate" to see your projected earnings.
The calculator will display your total earnings and show a growth chart over time.
Formula Explained
The savings account earnings calculator uses the 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
This formula calculates the future value of your savings account by accounting for compound interest, which means interest is earned on both your initial deposit and the accumulated interest.
Worked Examples
Example 1: Annual Compounding
If you deposit $1,000 at an annual interest rate of 5% compounded annually for 3 years:
A = $1,000 × (1 + 0.05/1)1×3 = $1,000 × (1.05)3 = $1,157.63
Total earnings: $157.63
Example 2: Monthly Compounding
If you deposit $1,000 at an annual interest rate of 5% compounded monthly for 3 years:
A = $1,000 × (1 + 0.05/12)12×3 = $1,000 × (1.004167)36 ≈ $1,161.62
Total earnings: $161.62
Notice that monthly compounding yields slightly more interest than annual compounding for the same rate and time period.
Frequently Asked Questions
- What is the difference between APR and APY?
- APR (Annual Percentage Rate) is the simple annual interest rate, while APY (Annual Percentage Yield) accounts for compounding, showing the effective annual rate of return.
- How often should interest be compounded for maximum earnings?
- More frequent compounding periods (like monthly) generally yield higher earnings than annual compounding for the same rate.
- Is this calculator accurate for all savings accounts?
- This calculator provides an estimate. Actual earnings may vary based on specific account terms and conditions.
- Can I use this calculator for retirement accounts?
- Yes, the same compound interest principles apply to retirement accounts like 401(k)s and IRAs.