How Your Savings Grow
This calculator simulates your balance month by month: each month the current balance earns one month of interest (annual rate ÷ 12), then your deposit is added. That mirrors how most savings plans and brokerage auto-invest schedules actually work.
Worked Example
Starting with $5,000 and adding $200 every month at 6 % annual interest, after 10 years you would have about $41,900. You deposited $29,000 of that — the remaining ~$12,900 is compound interest working for you.
Why Regular Deposits Beat Lump Sums (for Most People)
- Consistency compounds. Each deposit starts earning immediately and keeps earning for the rest of the horizon.
- Time in the market matters more than timing. Starting five years earlier typically beats doubling your monthly amount later.
- Automation removes willpower from the equation — set up a standing order on payday.
Realistic Rate Assumptions
High-yield savings accounts have historically paid roughly 0.5–5 % depending on the rate cycle; diversified stock portfolios have returned about 7–10 % per year on average over long horizons, with substantial swings along the way. Use conservative numbers for planning.