Savings Calculator

Q: What's the difference between simple and compound interest on a regular savings plan?

For a recurring monthly deposit, simple interest applies an annual rate to each contribution from deposit to maturity (first contribution earns n months, last earns 1 month). Monthly compound interest applies a monthly rate to the running balance every month. At the same nominal rate, simple interest on a recurring deposit can sometimes return slightly more than compound interest because the compound effect on small monthly deposits over a short term is small.

Q: How much will I have if I save $300 a month for 24 months at 4%?

With simple interest: $7,200 principal + about $300 interest = approximately $7,500 at maturity (before any taxes). The exact number depends on the formula your bank uses. This calculator computes pre-tax interest — actual after-tax results depend on your jurisdiction and account type.

Q: What is the maturity value of a $100,000 1-year deposit at 4%?

Pre-tax interest is $4,000, so the maturity value is $104,000. Most fixed-term deposits use simple interest (per-year rate × principal). For a fixed lump sum compounded monthly, use the compound interest calculator instead.

Q: Is my deposit insured?

In the US, FDIC insurance covers up to $250,000 per depositor, per insured bank, per ownership category. NCUA provides equivalent coverage at credit unions. Other countries have similar schemes (UK FSCS £85,000, EU national schemes €100,000, etc.). For amounts above the limit, spread funds across multiple insured institutions.

Monthly deposit, rate, and term — get simple and compound maturity value at a glance.

⚠️ Most savings accounts use simple interest. Promotional rates, conditional bonuses, and early-withdrawal penalties differ by bank. Tax treatment depends on your jurisdiction and account type — this calculator computes pre-tax interest only.

Savings Interest Formulas

Simple interest (recurring deposit): Interest = Monthly × annualRate × n(n+1)/2 ÷ 12 (each monthly deposit earns simple interest until maturity)
Monthly compound: FV = M × ((1 + r)ⁿ − 1) ÷ r (running balance × monthly rate)
r = monthly rate (annual ÷ 12), n = total months

Most deposit / savings accounts use simple interest. Compound is more common for investment accounts. At the same nominal rate, simple interest on a recurring deposit can occasionally beat monthly compound because the compound effect on small monthly deposits is limited.

$300/month savings (simple) — Maturity Value

Rate	Term	Principal	Pre-tax interest	Maturity
3%	12 months	$3,600	$58.50	$3,658.50
3%	24 months	$7,200	$225.00	$7,425.00
3%	36 months	$10,800	$499.50	$11,299.50
4%	12 months	$3,600	$78.00	$3,678.00
4%	24 months	$7,200	$300.00	$7,500.00
4%	36 months	$10,800	$666.00	$11,466.00
5%	12 months	$3,600	$97.50	$3,697.50
5%	24 months	$7,200	$375.00	$7,575.00
5%	36 months	$10,800	$832.50	$11,632.50

$300 × 24 months × 4% → $7,200 principal + $300 pre-tax interest = $7,500 at maturity. Pre-tax — actual take-home depends on your jurisdiction.

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$100,000 1-year fixed deposit (simple)

Rate	Pre-tax interest	Maturity
3.0%	$3,000	$103,000
3.5%	$3,500	$103,500
4.0%	$4,000	$104,000
4.5%	$4,500	$104,500
5.0%	$5,000	$105,000

Most fixed-term deposits and CDs use simple interest — principal × rate. For lump-sum compounded growth, use the compound interest calculator.

Simple vs monthly compound (recurring deposit)

Simple — savings standardEach monthly deposit earns simple interest from deposit to maturity. First month gets n months of interest, last month gets 1.

Monthly compoundRunning balance × monthly rate, every month. Limited compounding effect on small monthly deposits over short terms.

Example ($500 / 5% / 24 months)Simple ≈ $625 interest vs compound ≈ $593 — simple is $32 higher.

Lump-sum is differentFor a fixed lump sum held over decades, compound dominates ($100K @ 7% / 30 years → simple $310K vs compound $761K).

Tax-advantaged savings (US examples)

Roth IRAPost-tax contribution; qualified withdrawals tax-free. Annual limit $7,000 (under 50, 2024).

Traditional IRA / 401(k)Pre-tax contribution; tax-deferred growth; withdrawals taxed as ordinary income.

HSATriple tax-advantaged for medical expenses (deductible contribution, tax-free growth, tax-free qualified withdrawal).

529 planState-sponsored, tax-free growth for qualified education expenses.

I-Bonds (US Treasury)Inflation-protected; federal tax deferred until redemption; state-tax-free.

Effective rateA 4% taxable account at a 24% bracket = 3.04% after-tax. Tax-advantaged keeps the full 4%.

Promotional rates and early-withdrawal penalty

Promotional / bonus ratesOften require direct deposit, debit card use, or relationship pricing. Rate falls to base if conditions are unmet.

Early-withdrawal penaltyCDs typically forfeit 3–6 months of interest if closed early. Some banks waive for hardship.

Loan against depositSome banks lend at deposit-rate + 0.5–1% rather than charging a withdrawal penalty.

HYSA promosOnline banks regularly run 4–5% APY promotions. Watch for rate caps and ladders.

Monthly deposit capsSome promotional accounts cap deposits at $200–$500/month to limit bank exposure.

Deposit insurance limits

FDIC (US)$250,000 per depositor, per insured bank, per ownership category.

NCUA (US credit unions)Equivalent $250,000 coverage.

FSCS (UK)£85,000 per person, per institution.

EU national schemes€100,000 per person, per bank.

Excluded productsStocks, mutual funds, money-market funds (non-deposit), and crypto are not deposit-insured.

Above the limitSpread across multiple insured institutions or account categories (joint, trust, retirement).

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Frequently Asked Questions

What's the difference between simple and compound interest on a recurring savings plan?

For a recurring monthly deposit, simple interest applies an annual rate to each contribution from deposit to maturity (first contribution earns n months, last earns 1 month). Monthly compound applies a monthly rate to the running balance every month. At the same nominal rate, simple can sometimes return slightly more on a recurring deposit because the compound effect on small monthly deposits is limited.

How much will I have if I save $300 a month for 24 months at 4%?

With simple interest: $7,200 principal + about $300 pre-tax interest = approximately $7,500 at maturity. Actual after-tax results depend on your jurisdiction and account type.

What is the maturity value of a $100,000 1-year deposit at 4%?

Pre-tax interest is $4,000 → maturity value $104,000. Most fixed-term deposits use simple interest (per-year rate × principal). For a lump sum compounded monthly, use the compound interest calculator.

How are taxes handled?

Tax treatment varies by country and account type. In the US, interest in a regular savings account or CD is taxed as ordinary income at your marginal rate. In an IRA or 401(k), it grows tax-deferred. This calculator computes pre-tax interest only.

Is my deposit insured?

In the US, FDIC insurance covers up to $250,000 per depositor, per insured bank, per ownership category. NCUA provides equivalent coverage at credit unions. Other countries have similar schemes (UK FSCS £85,000, EU national schemes €100,000). For amounts above the limit, spread funds across multiple insured institutions.

Formulas & References

Last reviewed: 2026-05-10

Simple interest (recurring deposit) — Interest = Monthly × annualRate × n(n+1)/2 ÷ 12
Monthly compound (annuity FV) — FV = M × ((1 + r)ⁿ − 1) ÷ r
FDIC deposit insurance (US) — fdic.gov

⚠️ This calculator uses pure mathematical formulas. Real maturity values depend on your bank's compounding method, promotional terms, and tax treatment.