Regular Savings Growth
What regular monthly deposits become after a few years, and how much of it is interest.
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Formula
How the calculation works
The loop here is small and does one thing per month: grow the balance by one twelfth of the annual rate, then add the deposit. On the page example, 300 a month at 6% over ten years leaves 49,164, of which 36,000 is your own money and 13,164 is interest. The deposit arrives at the end of the month, so a deposit made in month one earns interest for 119 months, not 120.
Time matters more than the rate, and the reason is compounding. The same 300 at 6% reaches 49,164 in ten years but 301,355 in thirty: six times the balance from three times the deposits. Early money does far more work than late money, and doubling the deposit doubles the total but never accelerates the clock.
The tool rounds years to whole months, so 2.5 years means 30 deposits and not 30.5. That is the right convention for a monthly account and the wrong one if you pay in weekly, where the extra deposits between month-ends are real money the loop never sees. A negative rate is rejected outright: a deposit account cannot shrink your balance by policy.
Common mistakes
- Multiplying the deposit by the months and calling that the balance: 300 times 120 is 36,000, and the missing 13,164 is the whole point of the calculation.
- Assuming interest is credited yearly. The loop compounds monthly, which is worth a few hundred more over ten years than a single annual credit at the same rate.
- Treating the annual rate as the monthly one. A 6% annual rate is 0.5% a month; using 6% a month would inflate a ten-year balance to millions.
When to use it
- Use it when you know what you can put aside each month and want to see where that lands in five or ten years, and how much of the total is interest rather than your own money.
- For the opposite question, how long a fixed monthly amount takes to hit a target, use the savings goal tool; that one solves for the months instead of the balance.
Worked example
300 a month at 6% over ten years reaches 49,164 — 36,000 deposited, 13,164 interest.
Common questions
When is interest added?
Monthly, with the deposit made at the same time, the usual arrangement.
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