## Using A Savings Calculator

Speaking to an independent financial adviser is the best first step in planning a long-term savings program. The method in which money is invested depends heavily on the risk-versus-reward strategy chosen by the individual. Whatever the source of savings, using a handy interest calculator will clearly show the expected increase over a specific period. In order to save money, one must understand the rate at which interest affects the amount of principal. Knowing future values allows for easier future planning.

## A Simplified Calculator

A savings calculator uses certain information to determine how interest rates affect an individual’s future bank balance. Most of these calculator tools allow the input figures in nearly any major world currency. Fields include an initial amount, the annual percentage rate of interest, period of interest calculation in months or years, and an overall period term.

The results can be displayed in graph form, showing the total amount of saving principal plus interest during any time of the period chosen. This is a very important tool for those who are expecting to withdraw a certain amount of funds for a planned future purchase or other investment.

## Calculator For Deposit Savings

A savings account serves a simple purpose, namely to save money. The increased amount in the account results from compounded interest earned. It is up to the individual to decide what the savings are to be used for. However, regardless of the future intention, knowing amounts ahead of time is critical when it comes to planning other investments, retirement, or spending.

A deposit savings calculator includes fields for currency type, initial deposit amounts, regular monthly deposits, annual percentage rate, term of the calculation in months or years, and the frequency of interest calculation. The user can also figure future balances with expected inflation percentage.

Most banks use a monthly or yearly compounding schedule, and individuals who choose to calculate using a savings tool are advised to check if there are other options for their savings account type. Changing the compounding frequency may be to some investors’ advantage if the money saved is to be invested in another manner several years later.

## Investing Saved Earnings

With interest, balance amounts can double or even triple over 20-30 years. However, this may not be deemed sufficient for many individuals. The projected costs of college for dependents, new home purchases, and the rising cost of living have prompted many to choose the savings calculator method of forecasting how current savings methods will stack up against the estimated future outlays.

In order to save money, remember that it is all about deciding where to invest and the possible interest earnings. A simple savings account involves compound interest. Peer-to-peer investing and the stock market game involve something a bit more risky in terms of the initial investment and likely return on that investment.

Using a simple interest calculator tool is an invaluable part of the first-stage planning process. While this calculator can not predict the future with absolute certainty, it does show precisely how much interest will be earned if regular deposits are made. It also accurately shows what happens if inflation is taken into consideration.

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