How is savings growth calculated?

The calculator compounds your starting balance and adds each regular deposit, applying the interest rate each period. The final balance is the future value of the starting amount plus the future value of the stream of deposits. Interest earned is the final balance minus everything you put in.

Does this account for tax on interest?

No. The result is before Resident Withholding Tax (RWT). In New Zealand, interest is taxed at your RWT rate, so your real after-tax balance will be a little lower. For a conservative estimate, use a slightly lower interest rate.

What interest rate should I use?

Use the rate your savings account or term deposit pays. Everyday savings accounts pay less than term deposits. If you are unsure, a conservative figure gives a safer estimate, and you can compare current rates on our NZ Interest Rates reference page.

Why do small regular deposits add up so much?

Because of compounding. Each deposit earns interest, and that interest then earns interest. The longer the time frame, the larger the share of your final balance that comes from interest rather than your own contributions.

Savings Calculator

This calculator projects how your savings grow when you combine a starting balance with regular deposits and compound interest, so you can see whether your current saving habits will reach a goal. You enter your starting amount, how much you plan to deposit and how often (weekly, fortnightly, monthly or yearly), the interest rate your account pays, and the number of years you intend to save for. The calculator returns your projected final balance, the total amount you will have personally contributed over that time, and how much of the final balance is interest earned rather than your own money. Because interest compounds, it is applied to your balance and to every earlier deposit each period, so a longer time frame lets interest do a growing share of the work, often more than most people expect. Use it to test different deposit amounts or frequencies, to see how much extra a higher interest rate or an earlier start is worth, or to set a savings goal and work backwards to the deposits needed. Figures shown are before Resident Withholding Tax (RWT) on interest, so your real after-tax balance will be a little lower; using a slightly reduced rate gives a more conservative estimate. Results are indicative only and depend on rates staying steady and deposits being kept up.

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Starting amount

Regular deposit

Deposit

Interest rate

Years

yrs

$16,686.80

projected balance

Total contributed$13,000.00

Interest earned$3,686.80

Figures are before Resident Withholding Tax (RWT) on interest.

How savings growth works

Your balance grows in two ways: the money you add, and the interest that money earns. Interest compounds, which means each period you earn interest on your deposits and on the interest already added. Over a long period, compounding does a surprising amount of the work, and the interest can become a large share of your final balance.

Worked example

Sione starts with $1,000 and adds $100 a month for 10 years at 4.5% per year.

He contributes $1,000 plus $12,000 in deposits, which is $13,000 of his own money. With interest, the balance grows to about $16,700. That means roughly $3,700 of the final balance is interest, earned simply by saving steadily.

If he saved for 20 years instead of 10, the balance would be about $41,300, with over $16,000 of it interest. Time is the biggest lever.

Tips to save faster

Automate your deposits so saving happens before you can spend it.
Even small regular amounts add up once compounding takes hold.
Shop around for a higher interest rate, and consider a term deposit for money you will not need soon.
Remember interest is taxed at your RWT rate, so your real return is a little lower than the headline rate.

Frequently asked questions

Does this include tax?

No. The result is before Resident Withholding Tax. Your after-tax balance will be slightly lower, so use a slightly lower rate for a conservative estimate.

What rate should I use?

Use the rate your account or term deposit pays. You can check current figures on our NZ Interest Rates reference page.

Who this calculator is for

This calculator is for anyone projecting how their savings grow over time with regular deposits and interest.

What this calculator assumes

The starting balance, regular deposit, interest rate, frequency and term you enter.
The interest rate stays constant and interest compounds as set.
It shows figures before tax; resident withholding tax (RWT) reduces real returns.
Projections are indicative, not a guarantee.

Related calculators

Compound Interest Calculator: growth of a lump sum.
Term Deposit Savings Calculator: returns on a fixed-term deposit.
Investment Calculator: project investment growth.
NZ Interest Rates: current savings and deposit rates.
Choosing a Bank Account: the background to this calculation.
Dental Costs in New Zealand: How to Pay Less: the background to this calculation.
Funeral Insurance vs Saving: the background to this calculation.
Notice Saver Accounts: the background to this calculation.

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