Calculate how long it will take to reach a savings goal, or find out how much you need to save each month to hit your target by a deadline. Includes interest compounding.
| Account Type | Typical APY (2024) |
|---|---|
| Traditional Savings | 0.01–0.5% |
| High-Yield Savings (HYSA) | 4.5–5.5% |
| Money Market Account | 4.0–5.0% |
| 1-Year CD | 4.5–5.5% |
| 5-Year CD | 3.5–4.5% |
Investment accounts grow through compound interest — your returns earn returns. Unlike simple interest (where you only earn on the principal), compounding means that every dollar of gain becomes part of the base that earns the next round of gains. The longer the time horizon, the more dramatic the effect.
A = P(1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) − 1) / (r/n)]
Investing $300/month starting at age 25 at 8% annual return gives you ~$1,006,000 by age 65.
Starting at 35 with the same $300/month: ~$440,000 — less than half, even though you only missed 10 years.
Those 10 years cost you $566,000 in future value, even though the missed contributions were only $36,000. That gap is the compounding effect in action.
Investment returns are not guaranteed. Stock market returns vary year to year — 8% is a long-term historical average for diversified index funds, not a promise. Tax-advantaged accounts (401k, IRA, Roth IRA) shelter gains from annual taxation, which can significantly increase real returns compared to a taxable brokerage account.