Savings Calculator | U.S. News
With patience and consistency, you can build up your savings for whatever purpose you need. U.S. News can help by showing you how your savings can grow. Our savings calculator illustrates how much money you will have going forward depending on your initial deposit, contributions, interest rate and time to grow – no math required.
Initial Deposit: The first deposit you make when opening a savings account. Some savings accounts require a minimum amount, but your first deposit can be larger.
Contribution: How much and how often – whether that be monthly, quarterly or annually – you make contributions to your account. This calculator assumes that you make your contributions at the beginning of each period.
Time To Grow: The number of years and months you plan to save your money.
Annual Percentage Yield: The rate of interest you earn on your savings over the course of one year, including compound interest.
Compound Frequency: How often interest is calculated for your savings and your already accumulated interest. This typically happens daily, monthly or quarterly.
The amount of money you should save each month depends on your goals and needs.
Some people set aside money in an emergency savings account, for instance. Other reasons people keep money in a savings account include:
- Down payment for a house.
- Down payment for a car.
- Vacation.
- Wedding.
- College education.
- Holiday gifts.
As of December 2023, the average interest rate for a savings account was 0.46%.
Since 2022, the average rate has steadily climbed. This is because the Federal Reserve carried out a series of interest rate hikes that raised the cost of borrowing money. When the Fed bumps up rates, banks and credit unions tend to increase interest rates for savings accounts.
The Fed paused its interest rate hikes beginning in September 2023. Whether the Fed increases or decreases rates going forward depends in large part on what happens with the inflation rate. The Fed’s interest rate hikes have been aimed at taming inflation.
While the average interest rate for savings accounts sat below 0.50% as of December 2023, various banks and credit unions offer much higher rates, with some APYs exceeding 5.00%.
Online banks are among those that pay high rates because they enjoy lower overhead costs than traditional brick-and-mortar banks.
Since no two savings accounts are identical, it pays to shop around for the account that fits your needs. When you’re comparing savings accounts, look for:
- High APY. The higher the APY, the more your savings can potentially grow.
- Frequent compounding. If interest on a savings account is compounded daily rather than monthly, for example, you stand to earn more interest.
- No fees. Many financial institutions don’t charge maintenance fees on savings accounts.
- Top-notch technology. You may be interested in opening an account at a financial institution with great tech features, such as a well-reviewed mobile app or an easy-to-use website.
- Solid customer service. Check online reviews to see what customers say about any financial institution you’re considering.
To get started, here’s a look at APYs available for savings accounts at several banks and credit unions.