Savings Calculator
For a savings account rather than an investment: enter what you have, what you add each month, and the APY your bank quotes. The rate here is contractual rather than assumed, so the projection is firmer than an investment forecast.
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APY is the number that matters
Banks quote both an interest rate and an APY. The APY already accounts for compounding within the year, which makes it the figure to compare between accounts. Two accounts with the same headline rate but different compounding frequencies will show different APYs, and the APY is the honest one.
Where the rate comes from, and why it moves
Savings rates track central bank policy fairly closely, and they are almost never fixed. A high-yield account paying well today can be repriced downwards with little notice, and banks rely on customers not noticing. It is worth checking your rate against the market once or twice a year.
Saving versus investing
Cash savings are for money you might need in the next few years: an emergency fund, a house deposit, a planned purchase. The balance is guaranteed and, within deposit-protection limits, safe. The trade is that over long periods cash typically loses ground to inflation, which is why money you will not touch for decades usually belongs somewhere else.
The last month tells you something useful
The interest earned in the final month is a good sense-check on scale. When that figure starts to look meaningful next to your monthly deposit, the account has begun to carry itself.
Frequently asked questions
Is my money safe in a savings account?
In most countries, deposits are protected up to a limit per bank per person. In the United States that is FDIC insurance; other countries have equivalents. Amounts above the limit at a single institution are not covered.
Should I save or pay off debt first?
Compare the rates. Debt at a rate higher than your savings rate costs you more than the savings earn, so clearing it usually wins — with the exception of keeping a small emergency buffer so a surprise does not push you back onto credit.
How much should I keep in cash?
A common guideline is three to six months of essential expenses as an emergency fund, plus anything you plan to spend within a few years.