Savings calculators

If you are saving with a particular goal in mind, a savings calculator will let you find out the amount of money you need to set aside every month based on the rate of interest that your savings will earn.

Usually a savings calculator will need you to input how much your goal is, the length of time you have to set aside money, and the rate of interest that your money will be earning.

So, if your goal is to have £6,000 in savings within two years, a savings calculator will tell you how much you need to put away every month. Now if your savings scheme just involves the space under your mattress, you don’t need a savings calculator to know that £250 a month for two years will add up to £6,000. But if your money is earning interest in a savings account, a savings calculator will show you how much less you can set aside for savings each month to arrive at the same goal in the same amount of time.

For example, if your savings earned a rate of interest of 5%, that translates to £247.58 each month over two years to save £6,000. An interest of 7% would mean that you only need £242.80 each month.

Many savings calculators can be found online, usually at bank and building society web sites.

Try http://www.webcalculator.co.uk/financial/savings.htm for an example of such a calculator.