Savings Calculator — Interest & Goals

Emergency savings come first. The standard benchmark is 3-6 months of essential expenses held in liquid, low-risk accounts — a household with $5,000 per month in essentials needs $15,000-$30,000 accessible. Dual-income households with stable employment often target the lower end; single-income households, variable-income earners, and those in volatile industries target the upper end or higher.

Beyond the emergency fund, the standard savings-rate benchmark is 15-20% of gross income for long-term goals (retirement, home purchase, education). A household earning $100,000 per year would save $15,000-$20,000 annually across retirement accounts and taxable investments. Savers behind age-based benchmarks typically need rates above 20% to catch up; savers ahead can allocate more aggressively to growth assets.

The formula is A = P × (1 + r/n)^(nt), where P is principal, r is annual rate, n is compounding frequency, and t is years. The intuition: interest earned in year one itself earns interest in year two, and so on — the growth curve bends upward over time.

Two concrete examples show the mechanism. $10,000 at 5% APY compounded daily grows to $12,834 after 5 years, $16,470 after 10 years, $27,126 after 20 years, and $44,677 after 30 years. The Rule of 72 provides a quick approximation: years to double ≈ 72 / interest rate. At 5%, money doubles in roughly 14.4 years; at 8% (long-run stock market return), in 9 years; at 10%, in 7.2 years. The cost of delay compounds the same way in reverse — a 10-year delay in starting to save costs roughly half the final balance at typical retirement horizons.

Match the account to the time horizon. Emergency funds and any money needed within 12 months belong in high-yield savings accounts (HYSAs) — as of April 2026, top HYSAs pay 4.0-4.5% APY with FDIC insurance up to $250,000 per depositor per bank. Online-only banks typically pay 10-20× more than large traditional banks' default savings rates.

Money needed in 1-5 years benefits from certificates of deposit (CDs) at 4.5-5.0% APY or Treasury bills (T-bills) at similar yields with no state income tax. Money needed in 5+ years typically belongs in diversified investment accounts — stock-heavy for horizons above 10 years, balanced allocations for shorter windows. Inflation is the silent cost: the 2025-2026 CPI averaged roughly 2.9-3.0%, so money held at 4.5% APY grows only 1.5-1.6% in real purchasing power.