If you’re curious about how much your savings could grow over time, using a savings calculator can help. Whether you’ve just opened a CD account or a high-yield savings account, this calculator can easily show just how much cash you’ll have after a specified period of time, taking into account compound interest and any regular monthly contributions.
To use the calculator, just put in the amount of cash you're starting with as the initial deposit. From there, add in the amount you plan on contributing to the account as a monthly deposit and also include the account's APY. You’ll then select a period of time over which your investment will grow, and our calculator will do the work for you.
How much should you save?
How much you should save each month really depends on your specific financial situation, but a general rule of thumb is to put aside three to six months’ salary or living expenses in an emergency fund. Another general rule that can help you prioritize savings is the 50 30 20 rule, in which you’ll budget 50% of your monthly income toward necessities, 30% toward wants and 20% towards savings.
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Choosing a savings account
Choosing a savings account depends on your personal financial goals. Here's what to consider.
Certificate of Deposit (CD): A certificate of deposit, or CD, is a type of savings account that holds a fixed amount of money for a fixed period of time. Typical term lengths for CDs range anywhere from three months to five years, so it’s not somewhere you’d store cash you need easy access to. Instead, it’s a good place to save cash you’re holding onto for a particular savings goal. For example, you may plan on purchasing a vehicle or making a down payment on a home in two years and are looking for a no-risk way to grow these savings.
Savings account: On the other hand, savings accounts are better suited for cash you’ll want available to use at any time, such as an emergency. If you’re looking to maximize your savings, consider opening a high-yield account. High-yield savings accounts are the same as traditional savings accounts, but they pay a higher-than-average APY on deposits.
Balance and deposit requirements: Some accounts have minimum balance and/or deposit requirements. If you fail to meet these, you could incur a fee.
Safety: Be sure to check whether a savings account is FDIC or NCUA insured.
Compare some of the best savings accounts below.
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