How to Use the Auto-Transfer Savings Calculator
Calculate the compound growth of regular monthly deposits. The calculator uses monthly compounding: your annual rate divided by 12 is applied each month to the growing balance. This shows how automated saving accelerates wealth over time.
The power of compounding becomes dramatic over long periods. Saving $500/month at 4% for 20 years yields a principal of $120,000, but the final balance exceeds $183,000 — more than $63,000 in interest alone. The longer the period, the greater the gap between principal and total balance.
Frequently Asked Questions
Monthly compounding applies interest each month. The annual rate is divided by 12 to get the monthly rate, which is applied to the growing balance. This produces higher returns than simple annual interest.
At 4% annual rate, saving $500/month for 20 years yields a principal of $120,000. With compounding, the total grows to about $183,000 — over $63,000 in interest alone.
This uses the pre-tax rate. To estimate after-tax returns, multiply your rate by (1 - marginal tax rate). For example, at 22% tax rate: 4% × 0.78 = 3.12%.