Use the savings calculator to manage your finances whenever you are saving up for a goal.
Typically, you'll start with a lump sum to deposit in a savings account, which will earn simple interest (APY, Annual Percentage Yield), and have a planned withdrawal date. The calculator works in any direction; you can input a target value you'd like to have, the interest rate, and the initial sum, to find the amount you'll have to put away each month to realize the target goal.
For example: Say we want to arrive at a target sum of 2000 in two years, while putting as little strain on our present budget as possible. Hypothetically, we found a savings account that pays a lordly 5% interest. Starting from zero, we know we have to pay in $79.41 per month. Our total investment would come to $1905.83, while the interest we'd earned came to $94.17, which is what they mean when they say "put your money to work to earn money."
You can find out the total contribution and interest in advanced mode.
In the present day in Western society, savings accounts seem to be a dim recollection for most of the population. Millions of Americans are just a paycheck away from poverty, according to Marketwatch, while CNBC reports 25% of US adults do not have any retirement savings.
For many adults in the working age, a 401(K) is the sole investment they've made, and that's only at their company's forceful urging.
It's easy to say "I'm too poor to start a savings account," but in reality, no account is too small and no savings plan is too humble. Even putting quarters in a piggy bank counts as something. If you see putting money into savings as "paying your future self," financial management suddenly seems much easier to manage.
While local savings rates may be too paltry to bother banking on, remember that international markets open up more opportunities.
The average savings account in the US pays around 0.09% and lower, according to CNN Financial. However, this is still more than zero, and the more you put away in savings, the better that percentage looks.
The important aspect of a savings account at a commercial bank is that the money may only be withdrawn at certain intervals set before-hand, ensuring that the money stays there once you put it there.
For better interest rates, shop around. There are online banking services with interest paying in the range of 2%, some as high as 2.35%, which becomes attractive even for small sums.