💰 Savings Calculator 2026

Compound interest earns interest on your interest. Instead of just earning on your principal, each period's interest is added to the balance, and future interest is calculated on this larger amount. Over time, growth accelerates.

Simple interest = Principal × Rate × Time (only on original amount). Compound interest calculates on principal PLUS accumulated interest. Example: $1,000 at 10% for 20 years: Simple = $3,000, Compound = $6,727.

More frequent = better. Daily compounding earns slightly more than monthly, which beats annual. However, differences are small. Monthly is most common for savings accounts. Daily for some high-yield accounts.

Annual Percentage Yield = effective annual rate accounting for compounding. 5% APR compounded monthly = 5.12% APY. Compare accounts by APY, not APR, for true comparison.

Common advice: 20% of income (50/30/20 rule). Even $50-100/month makes a difference. Automate transfers to savings. For emergencies, aim for 3-6 months expenses. For retirement, maximize employer 401k match.

High-yield savings: 4-5%+ APY (as of 2026). Traditional banks: 0.01-0.5%. Online banks often offer better rates. Compare at bankrate.com or nerdwallet. Consider CDs for even higher rates if you can lock funds.

Rule of 72: 72 ÷ rate = years. At 6% rate, money doubles in ~12 years. At 8% = ~9 years. At 10% = ~7.2 years. At 4% = ~18 years. Time and rate both matter significantly.

Formula: A = P(1 + r/n)^(nt). P = principal, r = annual rate (decimal), n = compounds per year, t = years. Example: $1,000 at 5% monthly for 10 years = $1,000 × (1.004167)^120 = $1,647.

FV = PMT × [((1 + r/n)^(nt) - 1) ÷ (r/n)]. This calculates the future value of a series of equal periodic payments with compound interest. Our calculator handles this automatically.

Usually pay off high-interest debt first. Credit card at 20% beats savings earning 5%. But keep a small emergency fund to avoid new debt. Then attack debt, then build savings.

3-6 months of expenses in easily accessible savings. Covers job loss, medical emergencies, car repairs. Keep in high-yield savings, not invested. This is your financial safety net before investing.

Inflation erodes purchasing power. If inflation is 3% and savings earn 4%, real return is only 1%. For long-term goals, investments (stocks, bonds) typically beat inflation better than savings accounts.

Savings = low risk, low return, liquid (savings accounts, CDs). Investing = higher risk, potentially higher return (stocks, bonds, real estate). Use savings for short-term goals, investing for long-term (5+ years).

Certificates of Deposit lock your money for a term (3 months - 5 years) at a fixed rate, usually higher than savings. Early withdrawal = penalty. Good for money you won't need. CD laddering spreads risk.

HYSA offers significantly higher APY than traditional savings (4-5% vs 0.01%). Usually online banks with lower overhead. FDIC insured up to $250,000. No minimums for many. Easy transfer to checking.

Budget guideline: 50% needs (rent, food, utilities), 30% wants (entertainment, dining), 20% savings/debt. Adjust based on income/costs. The key is having a system and tracking spending.

Calculations use standard compound interest formulas. Real results vary with rate changes, fees, taxes, and inflation. Use as planning tool. Actual account statements are official records.