How is the monthly deposit calculated?

The formula solves for PMT in the future value annuity equation: PMT = FV × r / [(1+r)^n - 1], where FV is your goal, r is monthly rate, and n is months.

What if I already have some savings?

Enter your current savings as 'Current Savings'. The calculator subtracts its future value from your goal, then calculates deposits needed for the remainder.

Can I adjust for inflation?

Enter a rate that's higher than inflation or use real (inflation-adjusted) values for your goal to account for purchasing power changes.

What if the required deposit is too high?

Try extending your time period, increasing your current savings, or lowering your goal. Even small adjustments can significantly reduce the monthly deposit needed.

Should I include my current savings?

Yes, including current savings reduces your required monthly deposit. The calculator accounts for how your existing savings will grow with compound interest.

Monthly Deposit Calculator

Find out how much you need to save each month to reach your financial goal.

Calculator

Result

Savings Goal: $0.00
Current Savings: $0.00
Interest Rate: 0%
Time Period: 0 years
Required Monthly Deposit: $0.00
Total Deposits: $0.00
Interest Earned: $0.00

Formula & Guide

Formula

PMT

Monthly Deposit

PMT = FV × r / [(1+r)^n - 1]

Solve for required payment

PMT

With Current Savings

PMT = (Goal - FV_current) × r / [(1+r)^n - 1]

Account for existing savings

Formula Variables

PMT

Payment

Required monthly deposit

FV

Future Value

Your savings goal

FV_current

Future Value of Current Savings

Current savings with compound interest

r

Rate

Monthly interest rate

n

Periods

Number of months

Step-by-Step Scenario

Example Scenario

Savings Goal

$25,000

Current Savings

$5,000

Interest Rate

4% annually

Time Period

3 years

1

Calculate Monthly Rate

r = 4% ÷ 12 = 0.333% = 0.00333

2

Calculate Future Value of Current Savings

FV_current = $5,000 × (1.00333)^36 = $5,632

3

Calculate Remaining Amount Needed

Remaining = $25,000 - $5,632 = $19,368

4

Calculate Required Monthly Deposit

PMT = $19,368 × 0.00333 / [(1.00333)^36 - 1]
PMT = $19,368 × 0.00333 / 0.1265 = $510

Required Monthly Deposit = $510

Additional Examples

Emergency Fund

Goal: $25,000

Time: 3 years

Rate: 4%

Monthly Deposit

$658

Retirement Boost

Goal: $500,000

Time: 20 years

Rate: 7%

Monthly Deposit

$958

Understanding Monthly Deposit

Goal-Based Planning

Start with your target amount and calculate backwards to determine the monthly deposit needed to reach it.

Interest Reduces Burden

Higher interest rates significantly lower the required monthly deposit by accelerating growth.

Time is Your Ally

Longer time periods allow for smaller monthly deposits while still reaching your goal.

Existing Savings Help

Current savings reduce monthly deposit requirements as they grow with compound interest.

Important Notes

Automate deposits to ensure consistency and avoid missing payments.
Review and adjust your plan annually based on progress and changes.
Consider increasing deposits with raises or bonuses to reach goals faster.
Account for inflation in long-term goals to maintain purchasing power.
Higher interest rates significantly reduce required monthly deposits.
Starting with current savings can dramatically lower your monthly commitment.

Frequently Asked Questions

Common questions about monthly deposits.