This runs the savings question backwards. Instead of asking what a deposit will grow into, it asks how much you need to put away each month to arrive at a particular number by a particular date.
Key terms
- Goal — the amount you want to have at the end.
- Already saved — what you are starting with. It grows on its own alongside your deposits, so it reduces the monthly figure by more than its face value.
- Monthly deposit — the answer: what you need to add each month.
How it works
Two things grow at once: what you already have, and the stream of deposits you are adding. The calculator works out how much the starting amount will become on its own, then solves for the deposit that covers whatever is still missing.
Required monthly deposit
PMT = (FV − P(1 + i)n) × i ÷ ((1 + i)n − 1)
FV is the goal, P what you already have, i the monthly rate and n the number of months. With no interest the answer is simply the shortfall divided by the months.
Interest does real work here. Reaching $10,000 in five years from nothing needs $166.67 a month at 0%, but only about $143.33 at 6% — the account contributes roughly $1,400 of the total by itself. The longer the term, the larger that contribution becomes relative to what you put in.
Time matters more than rate
Doubling the rate helps. Doubling the time helps considerably more, because deposits have longer to compound and there are more of them. If the monthly figure looks impossible, extending the deadline usually moves it further than chasing a better account will.
How to use this calculator
- Enter the amount you want to end up with.
- Enter anything you have already put aside for it.
- Enter the annual rate your account pays.
- Set the deadline in years, then read the monthly figure. Compare “you will put in” with “interest does the rest” to see how much of the work is yours.
Frequently asked questions
What if I cannot afford the monthly amount?
Extend the timeline first — it usually has the largest effect. Adding to the starting amount also helps disproportionately, because that money compounds for the whole term rather than only part of it.
When are deposits assumed to be made?
At the end of each month, which is the conservative assumption. Depositing at the start of the month would earn a little more interest and lower the required figure slightly.
Does it account for tax or inflation?
No. The goal is in today’s money, and the result is a nominal figure. If the goal is years away, consider raising it to reflect what the thing you are saving for will cost by then.
What rate should I use for a savings account?
Whatever your account actually pays, which for instant-access accounts is often well below headline rates. Using an optimistic rate makes the monthly figure look smaller than it really needs to be.
Why is the deposit total less than the goal?
Because interest makes up the difference. The gap between what you paid in and what you ended with is exactly what the account earned for you.
