Savings goal: how long it actually takes, with interest

How long a savings goal takes isn't a mystery — it's addition, run forward one month at a time, with interest quietly compounding underneath if the account pays any. Once you know the rule for one month, you know the rule for all of them, and you can sanity-check any savings app's projection against arithmetic you did yourself.

The formula

Each month: balance = balance × (1 + APR ÷ 100 ÷ 12) + contribution. The balance earns a month's worth of the annual rate on whatever's already there, then the new contribution is added on top. Repeat that until the balance reaches the goal — the number of times you repeated it is the answer.

A real example: $6,000, no interest

Starting from $0, putting away $300 a month in cash, earning nothing.

1. With no interest, every month just adds $300: 6,000 ÷ 300 = 20 months exactly.

Twenty months of $300 is $6,000, dollar for dollar — no interest means the arithmetic is just the contributions added up. That's the baseline every other example builds on.

A real example: $20,000, with vs. without interest

A household already has $5,000 saved toward a $20,000 goal and adds $500 a month. Compare a plain 0% account to a 5% APR savings account, compounded monthly.

1. At 0% APR: purely contributions, so (20,000 − 5,000) ÷ 500 = 30 months.
2. At 5% APR: the balance also earns roughly 5% ÷ 12 ≈ 0.42% a month on whatever's already sitting there. Run that forward and the goal is cleared in 28 months, with the balance landing at $20,434.06 — over target, because months only come in whole numbers.

Same $5,000 start, same $500 a month — the only difference is a 5% APR sitting underneath, and it's worth 2 months.

A real example: what's worth more, a bigger contribution or a better rate

Same $20,000 goal, same $5,000 start, still at 0% APR, but the monthly contribution goes up by $100, from $500 to $600.

1. At $600/month, 0% APR: (20,000 − 5,000) ÷ 600 = 25 months exactly.

Raising the contribution by $100 a month cut the timeline from 30 months to 25 — 5 months faster. The 5% interest rate in the previous example, on the original $500 contribution, only bought back 2 months. At this goal size, an extra $100 a month you control beats a couple of points of interest you don't.

What this doesn't capture

This assumes a steady contribution and a steady rate; a real high-yield savings rate moves with the market, and a skipped or bumped contribution changes the actual date. It also caps at 1,200 months (100 years) — past that the tool reports "1200+" instead of a false-precision number. Treat the result as a planning estimate you can rerun any time your numbers change, not a guaranteed calendar date.

Run your own numbers

The free Savings Goal calculator runs this instantly for your own goal, starting balance, contribution and rate — entirely on your device.