Keep your savings on track and watch your savings account grow using this handy Savings Calculator from Savvy
Making regular deposits into a savings account requires discipline and motivation. Boost your savings enthusiasm by entering information into Savvy’s easy-to-use savings goal calculator and watch how your savings can grow over the years.
Using the savings calculator is quite simple. First of all, enter the current balance of your savings account and the amount you can afford to pay into it regularly. You can change the frequency of your deposits by clicking on the green arrow from weekly, to fortnightly or monthly.
Next, enter in the interest rate your money is earning and the length of time (the term) you intend to watch your savings grow. When you’ve finished, click anywhere on the Australian savings calculator to see your results.
As well as showing you how much your savings total will be at the end of your savings term, you’ll also be able to see the total amount you’ve contributed and the interest you’ve earned in that timeframe. The graph in the savings goal calculator shows you this information in visual form.
The interest you earn from a savings account is compounded, which means it’s added onto the principal that you deposit and subsequently generates interest on this combined amount. As you’re effectively earning ‘interest on interest’, your savings will grow more quickly as you gain interest on a larger amount of capital each month (as the savings interest calculator shows you in graph form).
For example, if you invested $2,000 in a savings account with a 2% p.a. interest rate, you’d earn $40 interest after the first 12 months. Over the following year, you’d gain 2% interest on $2,040, and so on as your savings increase. This is the effect of adding the interest onto your principal amount and generating interest on that higher figure: it leads to exponential growth, as you can see on the savings interest calculator graph.
If you’ve decided to save up for a specific goal, two main things will help you achieve your dream: having a savings plan and having the discipline to stick to it. Planning your personal finances is the first simple step to getting ahead, which is the most important step to give you the knowledge, motivation and understanding to set yourself financial goals and stick to them.
There are any number of ways you may decide is best to plan out and track your savings. You could keep a spending diary for a month to see where you’re spending money that you haven’t budgeted for. Analyse your spending carefully to see where you can make savings. Look at all your automatic payments for items such as online subscriptions and ask yourself if you’re really using all the services that you’re paying for. If not, cancel them! Keep a record of all the subscriptions you’ve cancelled and input this monthly amount into the Australian savings calculator to see how much you’ve really saved.
Additionally, you can use Savvy’s budget planner to work out exactly how much you’re able to put into your savings account each pay day. Make it a realistic sum so you’re still able to live relatively comfortably with some money left over for occasional treats.
You should always compare all the different savings account and finance options available to you. There are many different savings options available, including:
It’s important to work out what your long-term savings goals are and the timeframe over which you want to achieve a certain amount of savings. This could influence the type of savings account you choose to invest your funds in. Play around with different figures in the savings plan calculator to understand how a small amount deposited regularly can mount up if you leave it in your savings account for long enough.
Some, like term deposits and Certificates of Deposit, lock up your savings for a specified period. Other options, such as bonus rate savings accounts and high interest savings accounts, offer high short-term earning potential. Again, use the savings plan calculator to help you compare the effect of different interest rates and savings terms on your long-term savings balance.
Many savings accounts have a base variable interest rate and a bonus interest rate which is applied if certain deposit requirements are met. For example, an account may have a base interest rate of 0.5% p.a., but if a deposit of at least $250 is made into the savings account in the previous month, a bonus interest rate of 1.25% p.a. is applied for the following month. Other conditions, such as a minimum required balance and minimum or maximum withdrawals, may also affect your ability to access the bonus rate.
Savings offset accounts, which are an alternative to the above accounts, don’t offer a high interest rate but offset the principal sum of your home loan, meaning it could save you more overall.
It’s important to weigh up your options carefully in the comparison process, which you can conduct right here with Savvy. By adding more options and considering more factors in the overall process, you can secure the best account for your needs with more confidence.
Many high interest savings accounts have age restrictions attached. For example, they may only be available to 18- to 25-year-olds, or to over 25s only. Many banks and lenders offer such high interest savings accounts either to attract new young clients or to appeal to established customers with a strong financial track record.