How to Use the Rolling Savings Ladder Interest Calculator
A rolling savings ladder means opening a brand-new fixed-term savings account every single month. After about a year, you end up with one account maturing every month going forward, creating a steady rhythm of cash coming in — much like the blades of a windmill turning one after another. This calculator estimates the interest for one account using the standard simple-interest formula for installment savings: monthly deposit times the term in months times (term + 1), divided by 2, times the monthly rate. It then multiplies that by the number of completed accounts to get your total interest before tax.
For example, depositing $400 a month into a 12-month account at a 4% annual rate, with 12 completed accounts, results in total principal of $57,600 and total pre-tax interest of roughly $1,248, for a combined total of about $58,848.
Unlike Korea's flat withholding tax on savings interest, US bank interest is reported to you on Form 1099-INT each year and taxed as ordinary income at your own marginal rate, with no automatic deduction at the bank. Managing several accounts adds some bookkeeping overhead, but the ladder builds a steady saving habit and gives you liquidity roughly once a month once it's fully running.
Frequently Asked Questions
For each account, we multiply the monthly deposit by the term in months and by (term + 1), divide by 2, then multiply by the monthly rate — a standard simple-interest formula for installment savings. We then multiply that by the number of completed accounts for the total.
No. Unlike Korea's flat 15.4% withholding on savings interest, US bank interest is reported to you on Form 1099-INT and taxed as ordinary income at your own marginal tax rate, with no automatic withholding. This calculator shows interest before tax.