Savings Goal Calculator – How Much To Deposit

If you have a savings goal, this handy Savvy calculator will show you how much you need to deposit to achieve it

Last updated on June 24th, 2022 at 12:46 pm by Cate Cook

Plan to achieve your financial goals

Achieving your financial goals is all about planning in advance for your future needs. Savvy’s savings goal calculator is a useful tool in your financial toolbox, as it’ll help you calculate how much you need to put away per pay period in order to achieve your savings goal. Compare and crunch the numbers with Savvy today.

Savings goal calculator explained

How do I use the savings goal calculator?

This savings target calculator is easy to use and will help you find out how much you need to deposit regularly to achieve your financial goal in a set period. Simply type in how much you’ve saved up already, your financial goal, the interest rate you’re earning on your deposit and how often you’re making further contributions to your savings. From there, you can enter your saving term, which is the timeframe within which you aim to save that sum of money.

Use the green arrow to change the frequency of your deposits from weekly to monthly or fortnightly. Click anywhere on the calculator page to see how much you will need to contribute each fortnight or month to make your nest-egg dream a reality.

If you play around with the different input fields in the financial goal calculator, you’ll soon begin to see how increasing the size of your deposits, sometimes by just a small amount, and making deposits as frequently as possible can drastically alter how long it will take you to reach your savings goal.

How does compound interest grow my savings faster?

Compound interest is also known as ‘interest on interest’ – because it means that you are paid interest on the principal sum you deposited, plus also on the interest earned by your deposit.

For example, if you deposit $1,000 with 2% p.a. compounding interest, at the end of a year you will have $1,020, with the $20 being interest earned. The following year you will be awarded interest on $1,020, not just the initial $1,000 you deposited. In this way, your savings will grow far more rapidly than if you were just paid interest on your initial principal deposit sum.

Is it worth putting my savings into a term deposit instead?

That will depend on why you are saving and the time period of your savings plan. A term deposit is when you agree to lock away your savings for an agreed period of time (the ‘term’ of your deposit) in return for a fixed interest rate. The interest offered on term deposits is dependent on the length of the term, but tend to be slightly higher than the interest offered on high-interest savings accounts.

The downside to term deposits is that your money is locked away, and if you do need to access it in an emergency, you will possibly have to give notice and will have to pay a penalty fee for breaking your term agreement.

Top tips for achieving your savings goal faster

Deposit into an account that earns interest

Make sure that as your nest-egg grows, it works really hard for you by earning interest! Compounding interest is very effective in helping you to grow your savings, so make sure if you do have a lump sum, it is in a high interest-bearing account.

Link your savings account to offset your mortgage

If you are able to link your savings account to offset your mortgage, you could win in two ways: not only are you earning interest on your savings, but you’re also reducing the interest you pay on your mortgage, freeing up more funds to reach your goal sooner.

Make additional deposits if you're able

Use the financial goal calculator to work out the size of repayments needed to achieve your savings target, but don’t be constrained by this amount. If you’re able to, deposit more than the minimum required savings to build more interest faster, thus bringing your savings goal closer.

Don't be tempted to withdraw money

If you have your savings in an account that is easily accessible, it’s too easy to be tempted to withdraw money for treats or special occasions. However, you’ll be going backwards if you do dip into your savings and all your hard work and sacrifice could be lost if you are tempted to withdraw funds, so you should resist the urge to splash out.

Here’s more of your frequently asked questions about savings

Should I choose a high bonus rate savings account?

A bonus rate savings account is one where an additional percentage of interest is offered on top of the base interest rate, sometime for an agreed period of time. Therefore, they can be a good option if you want to earn the highest interest rate on your savings. However, be aware there are conditions attached to such accounts, such as making a certain number of deposits each month, which will determine whether you end up qualifying for bonus interest. As such, it’s important to find a bonus rate account with achievable conditions.

Are there specialised accounts to help my kids achieve their savings goals?

Yes – there are specialised accounts for kids designed to teach good savings habits. Such accounts encourage regular saving and try to instil healthy money management principals in children and young people. Many have no lower age limit and no monthly fees, although most have to be opened as joint accounts in the names of both the parent and child. The fees attached to these accounts (if any) will often vary once the child reaches 18 years of age, so it’s worth checking up to make sure your young adult has the most appropriate account as they grow older.

How often can I switch savings accounts?

In theory, there’s no limit to the number of times you can switch over to another savings account, although it is worth checking if there are any minimum time limits on the account you intend to open. However, you’re more likely to build your credit score if you stick to a single savings account and can prove you’re a disciplined saver. For this reason, it’s important to compare savings accounts before choosing which type of account to open. Savvy can help you decide which savings account is right for you by comparing accounts and presenting you with easy-to-understand comparison information.

Is it better to have a joint savings account with my partner for shared financial goals?

Yes – ‘two heads are better than one’ may well apply when it comes to disciplined savings. If you do open a savings account with your partner, it may be easier to find the discipline to save your money regularly and to not make any withdrawals if you have your partner to hold you to account. It can also be exciting to watch your nest-egg grow together and realise your shared financial goal is getting closer each month. Additionally, with both incomes being added to your account, you can accrue more interest to boost your savings.

Will my personal information be safe with an online savings account?

Yes – financial institutions offering savings accounts online are just as secure as any other traditional institution. They frequently use the same encryption software to protect your personal information and are held to the same high standards of financial regulation as the big banks in Australia. Users of electronic payment facilities in Australia are protected by the ePayments Code, which the Australian Securities and Investment Commission (ASIC) is responsible for monitoring.

Will I have to pay any fees if I want to withdraw from my savings account?

That will depend on the terms and conditions of your savings account, so it is worth reading them carefully and comparing accounts before deciding which one is best for you. In some cases, this may not be a fee, but instead a forfeiting of a bonus rate in some circumstances, so it’s extra important to be aware of any such conditions. If you have a term deposit, there will almost certainly be penalties if you withdraw your money before the savings term has expired.

How does a notice savings account work?

A notice savings account is a type of hybrid between a term deposit and a savings account. Rather than being able to withdraw your money whenever you want, with a notice savings account you need to give notice of your intent to withdraw funds. The notice period varies between 30 and 90 days. The advantage of this type of account is that they can offer higher interest rates than standard savings accounts and discourage impulsive spending due to the notice required to withdraw. They lack the flexibility of a standard savings account, but this may help you achieve your savings goals.