Project your future balance based on annual yield and compounding frequency.
Monthly
Daily
Quarterly
Annually
Estimated Future Balance
Total Contributions
Total Yield Earned
Understanding Savings Account Yields and Compounding
When you place money in a high-yield account, your wealth grows through two primary mechanisms: your consistent contributions and the power of compounding. This calculator helps you visualize how different yield rates and compounding frequencies impact your long-term financial goals.
How Does Yield Impact Your Savings?
The annual yield percentage represents the amount of money a bank pays you to keep your funds in their institution. Unlike a standard flat fee, this is calculated as a percentage of your current balance. Because most modern accounts compound monthly or even daily, you earn "interest on your interest," accelerating your growth over time.
Realistic Performance Example:
Suppose you start with an initial principal of 10,000 and commit to a monthly addition of 500. With an Annual Yield of 4.5% compounded monthly over 10 years:
Total Contributions: 70,000 (Initial 10k + 60k in monthly adds)
Yield Earned: 20,442.58
Final Balance: 90,442.58
Factors That Affect Your Savings Growth
Initial Principal: The base amount you start with provides the foundation for initial compounding.
Monthly Addition: Regular contributions significantly shorten the time required to reach specific financial milestones.
Compounding Frequency: The more often the yield is calculated (daily vs. annually), the faster your balance grows.
Duration: Time is the most critical factor in compounding; the longer you leave the funds untouched, the more exponential the growth becomes.
What is APY vs APR?
In the context of savings, you will often see "Annual Percentage Yield" (APY). This figure accounts for the effect of intra-year compounding, giving you a more accurate representation of what you will actually earn in one year. While "Annual Percentage Rate" (APR) is a simple rate, APY reflects the real-world growth of your account.
function calculateSavings() {
var principal = parseFloat(document.getElementById('initialDeposit').value);
var monthlyAdd = parseFloat(document.getElementById('monthlyContribution').value);
var yieldRate = parseFloat(document.getElementById('annualYield').value) / 100;
var compoundFreq = parseInt(document.getElementById('compoundingPeriod').value);
var years = parseFloat(document.getElementById('years').value);
if (isNaN(principal) || isNaN(monthlyAdd) || isNaN(yieldRate) || isNaN(years)) {
alert("Please enter valid numerical values.");
return;
}
// Formula for Future Value of a Single Sum: P(1 + r/n)^(nt)
// Formula for Future Value of a Series: PMT * [((1 + r/n)^(nt) – 1) / (r/n)]
var n = compoundFreq;
var t = years;
var r = yieldRate;
var pmt = monthlyAdd;
// Monthly PMT needs to be adjusted to the compounding frequency if they differ,
// but typically for these calculators we assume PMT matches the monthly cycle.
// Let's use a standard monthly contribution formula:
var totalMonths = t * 12;
var monthlyRate = r / 12;
// Future value of initial principal
var fvPrincipal = principal * Math.pow((1 + r/n), (n * t));
// Future value of monthly contributions
// We assume contributions are made at the end of each month
var fvContributions = 0;
if (monthlyRate > 0) {
fvContributions = pmt * ((Math.pow(1 + monthlyRate, totalMonths) – 1) / monthlyRate);
} else {
fvContributions = pmt * totalMonths;
}
var totalBalance = fvPrincipal + fvContributions;
var totalDeposited = principal + (pmt * totalMonths);
var totalEarned = totalBalance – totalDeposited;
document.getElementById('totalBalance').innerText = totalBalance.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalContributions').innerText = totalDeposited.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalEarned').innerText = totalEarned.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('savingsResult').style.display = 'block';
}