How does the Savings Goal Calculator work?
From the term and rate we derive n = years · 12 months and the monthly rate i = rate / 100 / 12. Your starting amount grows to start · (1 + i)n, and the deposit fills the remaining gap: deposit = (goal − start · (1 + i)n) · i / ((1 + i)n − 1) (if i = 0: gap / n).
Background & details
The main result – the monthly deposit – answers a very concrete question: "What do I have to set aside every month from today?" The second figure, total contributions, shows how much of that comes out of your own pocket. The gap between your goal and your contributions is what the interest added – the money that worked for you.
How to read the result
The longer the horizon and the higher the rate, the smaller the deposit you need. That is compound interest at work: early deposits have the longest time to grow. Stretch a goal from 10 to 15 years and the rate often drops more than you'd expect – with saving, time is the biggest lever, even ahead of return.
Realistic values
- Savings / fixed-term deposit: safe but low rates. Use the rate currently on offer and round down rather than up.
- Broad ETF plan: historically roughly 5–7 % per year as a long-run average – but with swings and no guarantee. For a 2–3 year goal that is too uncertain.
- Rule of thumb: the closer the goal, the safer (and lower-yielding) the money should be parked.
Common mistakes
The most common one is an over-optimistic rate for a short-term goal. Assuming 7 % for a car down payment due in two years can leave you short after one bad market year. The second: ignoring inflation. 50,000 buys less in 15 years than today – it's wiser to set the goal a bit higher. The third: thinking in gross terms. Interest and gains are often taxed, which trims your net return.
Practical tips
Set the deposit up as a standing order right after payday – "save first, spend later" works far better than hoping something is left at month's end. Re-run the goal at a slightly lower rate for safety; if the deposit is still doable, you have a buffer. And check once a year whether you're on track, rather than watching the portfolio daily.
This tool is ideal for any concrete goal with a fixed date: a house down payment, a big trip, a car, an emergency fund. It is less suited when you plan a variable deposit or pay in large irregular lump sums – in that case calculate in stages.