Whether you're saving up for a big purchase or a rainy day, you're going to need a plan.
Luckily, you don't have to calculate compound interest on your own. Using a tool can help you iron out all the hypotheticals when it comes to your savings account.
How to use the savings calculator
Use this savings calculator to find out how much your monthly contributions can grow over time. All you have to do is fill out the fields below. Enter your starting balance (this value could be zero) and how much you want to contribute monthly. From there, select a time frame and enter your bank's annual interest rate.
It's as simple as that! No number-crunching necessary.
Note: This tool is intended for personal use and will not provide the best savings estimate for businesses. If you're a small business owner, consider investing in a more advanced solution, such as small-business accounting software, to keep track of your financial resources.
Savings calculator definitions
Reference the definitions below if you're having trouble finding what values to plug in to the calculator tool:
Starting balance: the current balance in your savings account
Monthly contributions: the amount of money you will put into the account on a monthly basis
Time to grow: the amount of time you have to save
Annual interest rate: the interest rate applied to your savings account
Compounding: how often interest is paid and re-invested into your savings account
Money in the bank
Starting a savings account is a smart financial move, even if you're starting with zero dollars in the bank. Now that you know how much your savings can grow over time, it's on you to make it happen. Remember that it's never too late to start forming smart spending and saving habits.
If savings are on your mind and you're asking yourself "how much should I contribute to my 401k?", click through to learn more about retirement savings.