# Savings Goal Tracker Calculator

Saving money can be difficult, but it can help to know what you stand to earn if you choose to regularly put away a little cash. This calculator can help you compute how much you’ll need to save each month to meet a specified savings goal.

First enter your savings goal and the current balance of your savings account. Then provide the account’s annual interest rate and the number of years in which you would like to meet your goal. Press CALCULATE and you’ll see your account’s future value, a number that doesn’t include any additional deposits. To meet your goal, you’ll have to provide the number stipulated as the “total savings gap.” Below this, you’ll see the monthly deposit needed to meet your long-term goal.

## Today's Savings Rates

The following table shows current rates for savings accounts, interst bearing checking accounts, CDs, and money market accounts. Use the filters at the top to set your initial deposit amount and your selected products.

## Compounded Interest: The Future Value of Your Current Savings

How much money you have in savings now is not the same as how much money you will have in savings years from now. Understanding the present value of your money in comparison to the future value is one of the subtle ways you can differentiate yourself from less savvy investors. Here is what you need to know about compound interest.

### What Does Compound Interest Mean?

There is an old saying among ultra-rich families that they should never touch their principal. In layman's terms, this means the money they spend is the amount gained from interest rather than their actual holdings. How is this possible?

To understand, you must know the definition of compound interest. Without turning this into a complex economics discussion, what is important is that the money you have invested each year has earned interest. Think of compound interest as your reward for your prior investments. Once your next interest earning is received, you are rewarded with the bonus of added interest.

Consider the mathematics. If you deposited $1,000 last year with 6 percent interest, you would have $1,060. After two years, your interest earnings would more than double, giving you a grand total of $1,123.60. Your $60 in interest garnered another $3.60 at 6 percent. Compound interest is effectively the interest you gain from your existing interest.

### How Does Compound Interest Help You?

As an investor, you want to maximize your savings via every potential earning scenario available. The concept of compound interest can be your best friend. As soon as you make a deposit, you will start growing your savings at a steady rate. Better yet, these savings will grow exponentially over time.

Here is an example to help you understand just how dramatically your nest egg can grow through the magic of compound interest. Let's say that you have $10,000 to invest now. You could use that money to make a down payment on a house, purchase a car, or splurge on a dream vacation.

### Thinking Long Term

Presuming that you already have a place to live, have adequate transportation, and appreciate that such a hefty price tag for a vacation is frivolous, you can consider investing the money. After one year at 6 percent interest, your earnings will be $600, and you will have savings of $10,600.

In year two, compound interest starts doing some of the heavy lifting for you. You earn an additional $36 for the interest on the previous year's $600 gain via interest. So, your nest egg increases to $11,236 after only two years. After five years, your savings will be $13,382.26. After a decade, you will be up to $17,908.49. By year 20, that amount will nearly double to $32,071.35. If you are 30 now and plan to retire at 65, there will be $76,860.87 waiting for you from your original $10,000 investment. Doesn't that sound better than a vacation?

Compound interest may sound like a scary term. As you now know, it is not. In fact, it can be the key in your turning a modest nest egg into a huge safety net later in life.

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