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How the balance is calculated

APY (annual percentage yield) already includes compounding, so we convert it to the equivalent monthly rate. That way a lump sum grows by exactly the APY each year: $10,000 at 4% APY becomes $10,400 after 12 months.

i = (1 + APY)^(1/12) − 1
FV = D₀(1 + i)ⁿ + M × ((1 + i)ⁿ − 1) / i

Where D₀ is the initial deposit, M is the monthly deposit, n is the number of months and i is the monthly rate. Deposits are assumed to be made at the end of each month.

Worked example

You open an account with $5,000, add $250 at the end of every month and earn 4.5% APY for 3 years (36 months).

Monthly rate: 1.045^(1/12) − 1 ≈ 0.003675, or about 0.3675% a month.
Growth factor over 36 months: 1.045³ ≈ 1.14117.
Initial deposit: 5,000 × 1.14117 ≈ $5,705.83.
Monthly deposits: 250 × (1.14117 − 1) ÷ 0.003675 ≈ $9,603.64.
Final balance: 5,705.83 + 9,603.64 ≈ $15,309.47. You deposited $14,000, so interest earned is about $1,309.47.

How $200 a month grows at different APYs

Starting from $0 with $200 deposited at the end of each month, rounded to the nearest dollar.
APY	1 year	5 years	10 years	20 years
1%	$2,411	$12,298	$25,224	$53,087
3%	$2,433	$12,916	$27,890	$65,371
4%	$2,444	$13,236	$29,339	$72,768
5%	$2,455	$13,563	$30,873	$81,161

Over one year the APY barely matters, because most of the balance is your own deposits. Over 20 years the gap between 1% and 5% is about $28,000 on the same $48,000 of deposits. The rate matters more the longer the money stays put.

Tips for using the result

Run a lower rate too. Savings rates are variable, so test the APY you get today and a lower one to see a realistic range.
Set a goal backwards. If you need $10,000 in two years, adjust the monthly deposit until the final balance reaches it.
Compare like with like. Use APY for every account you compare, not a mix of APY and APR.

Things the calculator does not include

Rate changes: savings rates are usually variable and can go up or down.
Taxes on interest, which depend on where you live and your income.
Account fees, withdrawals or balance caps on promotional rates.
Inflation, which reduces what the final balance will buy.

Frequently asked questions

What is the difference between APY and APR?

APR is the simple yearly rate before compounding. APY includes the effect of compounding, so it shows what you actually earn in a year. For savings accounts, compare APYs.

Why is my interest lower than the APY times my deposits?

Monthly deposits only earn interest from the month they go in, so money added later has less time to grow. Only the initial deposit earns the full APY for every year.

How often do savings accounts compound?

Many compound daily or monthly and pay interest monthly. Because APY already reflects the compounding frequency, you only need the APY to use this calculator.

How much will $200 a month be worth in 5 years?

At 4% APY with deposits at the end of each month, $200 a month grows to about $13,236 after 5 years. You deposit $12,000, so roughly $1,236 is interest. At 1% APY the total would be about $12,298.

Is a savings account or investing better for long-term goals?

Savings accounts suit money you may need soon because the balance does not fall. Investments can earn more over long periods but can also lose value. This calculator only models a steady savings rate.

Will the final balance match my bank exactly?

Probably not to the cent. Banks may compound daily, pay interest on different dates and change the rate over time. The calculator gives an estimate using a constant APY.

Results are estimates for informational purposes and are not financial, medical or professional advice. See our methodology and disclaimer.