Written by Plan your financial goals with Savvy’s savings calculator today
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.
Compare savings accounts
Are you looking to grow your savings? Compare a wide range of savings accounts with Savvy so you find the best deal in Australia and the highest interest rate to help grow your savings.
Savings calculator explained
How do I use the savings calculator?
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.
What does compounding interest mean and how does it work?
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.
How do I formulate a savings plan?
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.
What are my savings account options?
You should always compare all the different savings account and finance options available to you. There are many different savings options available, including:
- High interest savings accounts
- Online savings accounts
- Bonus rate savings accounts
- Term deposits
- Mortgage offset accounts
- Certificates of Deposit
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.
What is bonus interest on a savings account?
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.
Types of savings account
Why compare savings accounts with Savvy?
The requirements which may apply for high interest savings accounts
Age restrictions
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.
Minimum starting balance limits
A minimum balance to open a high interest account is quite common. This amount can range from $500 to $1,000 or more. The higher the interest rate offered, the higher the minimum deposit which is usually required.
Minimum monthly deposits
Some high interest savings accounts specify that a minimum deposit is required each month to gain the higher interest rate offered. This minimum amount varies anywhere from $20 up to $250 or more depending on the terms and conditions of the account you choose.
Paid withdrawals
Some banks and lenders charge fees for withdrawals from a high interest savings account to discourage withdrawals, and others place limits on the number of withdrawals permitted per month. Typically, account withdrawal fees range from $5 to $15 per transaction.
Linked transaction accounts
High interest savings accounts are not intended to be used as transaction accounts, so many financial institutions require you to have a linked transaction or everyday banking account. This enables you to easily transfer money from your everyday account to your savings account and vice versa.
More of your frequently asked questions about savings
Our savings calculators
Use our savings calculator to help you calculate how much you could save over a set timeframe based on different deposit sizes and frequencies.
Your savings can put in work for you. Crunch the numbers to see how much interest you could earn on top of your interest by compounding daily, monthly and annually.
It's crucial to have a clear idea of your monthly household budget to see where your money is going and where it could potentially be better spent.
If you're applying for a loan or need to know what your salary is for your tax return, you can use our annualisation calculator to work out what you'll earn this financial year.
Setting savings goals is important. With this tool, you can work out how much you'll need to deposit to reach your financial aims over a set timeframe.
Just as important as knowing how much to deposit is working out how long it'll take to reach your goals. This savings goal calculator can help you do just that.
