This savings calculator with interest projects future balance growth from a starting deposit, contributions, a stated interest rate, compounding frequency, tax rate, and inflation.
Calculate How Recurring Deposits Grow With Compound Interest, Taxes, and Inflation
This calculator projects what a savings plan turns into over time: a starting balance plus recurring deposits, growing at a stated rate. It also shows what’s left after annual tax on the interest, and after inflation eats into purchasing power. It’s built for people comparing a savings account, CD, or similar interest-bearing account against a goal or timeline — not for modeling stock market returns.
What Each Input Controls and What the Results Show
Starting Balance and Regular Contribution use whatever currency you pick; the math works the same either way. Interest Rate is the nominal annual rate your account quotes. Compounding Frequency turns that nominal rate into an effective annual yield — the same math banks use to calculate APY under Regulation DD, the Truth in Savings Act.
Contribution Frequency is a separate setting from compounding frequency: your bank might compound daily even though you only deposit once a month. The results show your nominal future balance, the pre-tax vs. after-tax split, the inflation-adjusted real value, and an estimated retirement income figure.
How the Future Balance Is Calculated
The formula adds up two things: what your starting balance grows into on its own, and what a series of equal deposits grows into. It’s the standard compound-interest and annuity formula from financial mathematics:
$$FV = P(1+i)^n + PMT \times \frac{(1+i)^n – 1}{i}$$
P is your starting balance, PMT is the contribution per period, i is the interest rate per period, and n is the total number of compounding periods. The nominal rate gets converted to an effective annual rate first — $EAR = (1+r/m)^m – 1$, the same formula Regulation DD uses to define APY — and that effective rate is then reapplied at your contribution frequency.
The most common mistake: typing in a rate your bank already quotes as an APY, then also picking a compounding frequency. That compounds the return twice and inflates every number that follows.
The tax input works differently. It lowers your nominal rate before compounding, because most interest from savings accounts and CDs is taxed annually as ordinary income the year it’s credited — per IRS Topic No. 403 — not deferred until you withdraw it.
That’s a reasonable stand-in for a taxable deposit account. It’s a poor stand-in for a taxable brokerage account, where gains aren’t taxed until you sell, or for a 401(k) or Roth IRA, where the tax treatment is completely different. Plug a marginal tax rate into this field for either of those and you’ll overstate the drag.
A few edge cases worth knowing. At 0% interest, the formula just adds up your deposits — no growth, which is correct. At 0 years, the future balance equals your starting balance.
A 100% tax rate zeroes out all growth; it’s mathematically valid but not something you’ll run into in practice. And it’s normal, not a bug, for the real (inflation-adjusted) growth rate to land at or below zero when your after-tax rate is close to your inflation rate.
Worth saying plainly: these are projections based on the numbers you enter, not a promise of what any account will actually pay. This tool isn’t giving you personalized tax, legal, or investment advice.
Why the “Future Passive Income” Figure Uses the 4% Rule, Not a Formula
This estimate applies the 4% rule to your projected real balance — a widely used retirement-planning guideline, not a law or a guaranteed formula. It comes from William Bengen’s 1994 research and got a second life from the 1998 Trinity Study (Cooley, Hubbard, and Walz, AAII Journal), both of which tested how different withdrawal rates held up across 30-year stretches of market history.
Bengen has since revised his own number upward, and other analysts land anywhere from about 3.7% to 4.7% depending on assumptions. Treat this tool’s number as a rough anchor, not a promised income.
Principal vs. Interest Growth Over Time
The interest slice is thin in year 5 and wide by year 20. For the first several years, most of your balance is just money you put in — interest doesn’t start pulling its weight until later. That’s an argument for starting early, more than for chasing a slightly higher rate.
Typical Deposit Rates for Context (U.S., Federal-Level Figures Only)
| Reference point | Value | Source | As of |
|---|---|---|---|
| Federal funds target rate range | 3.50%–3.75% | Federal Reserve (FOMC) | July 29, 2026 |
| National average traditional savings account rate | 0.38% APY | FDIC national deposit rate data | June 2026 |
These are national averages and Fed policy benchmarks, not what any specific bank will pay you — actual rates vary a lot and shift often. State income tax on interest isn’t included here and depends on where you live. Check fdic.gov and federalreserve.gov for current numbers before relying on these.
Common Questions About This Savings and Interest Calculator
Should I enter a nominal rate or an APY?
Enter the nominal rate your account quotes, then set the compounding frequency separately. If your bank already quotes an APY, set compounding to annual so you’re not compounding it twice.
Does “Annual Tax on Growth” match my income tax bracket?
It’s the rate you expect to pay on that year’s interest, since the IRS taxes most savings and CD interest annually as ordinary income. It won’t match a 401(k) or Roth IRA, where taxes work differently.
Why is my real return lower than the rate I entered?
Real value divides your balance by cumulative inflation. If your after-tax rate is close to your inflation rate, purchasing power barely grows — or shrinks — even as the nominal number climbs.
Is the 4% retirement income figure guaranteed?
No. It’s a planning guideline applied to your projected balance, not a formula or a promise. Actual sustainable withdrawals depend on market returns and how long the money needs to last.
Does the currency selector change the math?
No. It only swaps the symbol shown. Enter your numbers in whatever currency you’re planning in, and every result scales the same way.