Long-Term Savings Growth (Simple Interest)

Simple interest savings calculator for long-term growth planning

This calculator estimates how much your savings could grow when interest is calculated using simple interest. Simple interest is different from compound interest because the interest does not earn interest on itself. Many people run into this when they are comparing a basic savings product, a fixed-term account, a notice deposit, or a situation where interest is calculated linearly on the amount deposited for the time it has been held.

The goal here is a single decision: if you keep saving for a set number of years at a stated simple interest rate, how much money could you end up with, and how much of that total is your own deposits versus interest. This page is intentionally not designed for investment returns, market volatility, or compounding products. If your product compounds monthly or annually, this calculator is not the right tool.

To use it, enter your initial amount, your monthly contribution, the annual simple interest rate, and your time horizon in years. The calculator then estimates the final balance at the end of the period. It also breaks down the total you contributed and the total interest earned so you can see whether your outcome is driven by consistent saving or by interest.

The monthly contribution part matters because each monthly deposit has a different time to earn interest. Your first monthly deposit has almost the full time horizon to earn interest, while the last deposit earns little or none. The calculator handles this by applying simple interest to each deposit based on how long it remains in the account. You can optionally switch the timing from end-of-month to start-of-month. Start-of-month contributions earn about one extra month of interest per deposit, which can move the total noticeably over many years.

The outputs are meant to be practical. The final balance is the number most people need for goal planning. The total contributed tells you what you actually had to put in. The interest earned shows the benefit of the rate and time. The average interest per year helps you sanity-check whether the result is reasonable, especially when you are comparing two simple-interest offers.

Assumptions and how to use this calculator

• Simple interest only: interest is calculated linearly and does not compound. If your interest is added and then earns interest, use a compound interest calculator instead.
• Monthly contributions are treated as equal deposits made once per month, either at the end of the month (default) or at the start of the month (optional setting).
• The time horizon is converted to months for the contribution schedule. If you enter a decimal number of years, it is interpreted as an approximate month count (years × 12, rounded to the nearest month).
• The interest rate is assumed to be a nominal annual simple rate applied proportionally to time. No day-count conventions (365 vs 360) are applied.
• Taxes, fees, inflation, and changes to the rate over time are not included. Use the result as a planning estimate, not a guaranteed outcome.

Common questions

What does “simple interest” mean in plain terms?

Simple interest means the interest is calculated on the deposited amount for the time it is held, without interest earning interest. For a single deposit, it is typically principal × rate × time. If your account adds interest to the balance and then the next interest calculation uses that higher balance, that is compounding and this calculator will understate growth.

Why does the timing of monthly contributions matter?

Each contribution earns interest for a different length of time. Depositing at the start of the month gives each deposit slightly more time to earn interest than depositing at the end of the month. Over long horizons and higher rates, that extra time adds up.

Can I use this for a product that advertises an annual rate but pays monthly?

Only if it truly remains simple interest and the monthly payments do not become part of the interest-bearing base for future interest calculations. Many products that “pay monthly” are still compounding in practice because the paid interest stays in the account and increases the balance. If you are unsure, assume it compounds and use a compound calculator.

What if I do not know my exact monthly contribution?

Use a reasonable estimate and run a few quick variations, for example 500, 750, and 1,000 per month. The total contributed line helps you quickly see what you would need to put in to reach the final balance. This is often more useful than precision when you are planning long-term behavior.

Why is the interest earned lower than I expected at high rates?

With simple interest, interest does not build on itself. Over long periods, compounding makes a big difference. If you expected “interest on interest,” your mental model was compounding. Also remember that most of your monthly deposits have not been in the account for the full number of years, so they earn less interest than the initial amount.