Estimate your potential earnings on a high yield savings account with monthly contributions.
Estimated Results:
Total Principal Deposited: —
Total Interest Earned: —
Final Balance: —
Understanding Your High Yield Savings Account Earnings
High Yield Savings Accounts (HYSAs) offer significantly higher interest rates compared to traditional savings accounts, making them an attractive option for growing your savings. This calculator helps you visualize your potential growth by factoring in your initial deposit, regular monthly contributions, the account's annual interest rate, and the duration you plan to keep the funds invested.
How the Calculation Works
The calculator simulates the growth of your savings month by month. It uses a compound interest formula, adjusted for monthly compounding, to accurately predict your earnings. Here's a breakdown:
Initial Deposit: This is the lump sum you start with.
Monthly Contribution: This is the amount you plan to add to your savings each month.
Annual Interest Rate: This is the percentage of your balance that the bank pays you in interest over a year.
Monthly Interest Rate: We derive this by dividing the annual rate by 12 (e.g., a 4.8% annual rate becomes 0.4% monthly).
Account Duration: The total number of months you want to simulate.
The core of the calculation involves:
Starting with the initial deposit.
For each month:
Add the monthly contribution to the current balance.
Calculate the interest earned for that month based on the (new) balance and the monthly interest rate.
Add the earned interest to the balance.
This iterative process ensures that your interest earnings are compounded, meaning you earn interest not only on your principal and contributions but also on the previously earned interest.
Formula Explanation:
While the calculator performs a month-by-month simulation, the underlying principle relates to compound interest. The effective balance at the end of a period can be approximated by considering the future value of an ordinary annuity for the contributions and the future value of a lump sum for the initial deposit.
For each month m (from 1 to N, where N is the total number of months):
Balancem = (Balancem-1 + Monthly Contribution) * (1 + Monthly Interest Rate)
Where Balance0 is the Initial Deposit.
The Total Interest Earned is the Final Balance minus the sum of the Initial Deposit and all Monthly Contributions.
Why Use This Calculator?
This calculator is ideal for:
Estimating how quickly your savings can grow in a HYSA.
Budgeting and setting savings goals.
Comparing the potential returns of different HYSA rates.
Understanding the power of compound interest and consistent saving.
By inputting your specific details, you can gain a clearer picture of your financial future and make informed decisions about where to keep your hard-earned money. Remember that advertised interest rates can change, and this calculator provides an estimate based on the rate you input.
function calculateSavings() {
var initialDeposit = parseFloat(document.getElementById("initialDeposit").value);
var monthlyContribution = parseFloat(document.getElementById("monthlyContribution").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var accountDurationMonths = parseInt(document.getElementById("accountDurationMonths").value);
var totalPrincipalDeposited = 0;
var totalInterestEarned = 0;
var currentBalance = initialDeposit;
// Validate inputs
if (isNaN(initialDeposit) || initialDeposit < 0) {
alert("Please enter a valid initial deposit.");
return;
}
if (isNaN(monthlyContribution) || monthlyContribution < 0) {
alert("Please enter a valid monthly contribution.");
return;
}
if (isNaN(annualInterestRate) || annualInterestRate < 0) {
alert("Please enter a valid annual interest rate.");
return;
}
if (isNaN(accountDurationMonths) || accountDurationMonths < 1) {
alert("Please enter a valid account duration in months.");
return;
}
var monthlyInterestRate = annualInterestRate / 100 / 12;
totalPrincipalDeposited = initialDeposit;
for (var i = 0; i < accountDurationMonths; i++) {
currentBalance += monthlyContribution; // Add monthly contribution
totalPrincipalDeposited += monthlyContribution; // Track total principal
var interestThisMonth = currentBalance * monthlyInterestRate;
totalInterestEarned += interestThisMonth;
currentBalance += interestThisMonth; // Add interest to balance
}
var finalBalance = currentBalance;
document.getElementById("totalPrincipal").textContent = formatCurrency(totalPrincipalDeposited);
document.getElementById("totalInterestEarned").textContent = formatCurrency(totalInterestEarned);
document.getElementById("finalBalance").textContent = formatCurrency(finalBalance);
}
function formatCurrency(amount) {
return "$" + amount.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}
// Initial calculation on load if values are present
document.addEventListener('DOMContentLoaded', function() {
calculateSavings();
});