Short-Term Savings Calculator

If you’re saving for a short-term goal, such as a vacation or a new laptop, the right account could help you reach that goal faster. Consider opening an account with a high annual percentage yield (APY) to maximize your savings. Our simple, short-term savings goal calculator can estimate how your balance could grow over time with interest earnings and regular contributions.

How to Calculate Your Savings

  • Initial savings: Your initial savings amount will be your starting point for future savings. Having initial savings set aside could help you reach your goal faster.  
  • Future contributions: Making ongoing contributions, either bi-weekly, monthly or when you can afford to, could help you grow your balance even faster. Determine how much and how often you’ll add to your initial savings.
  • Annual percentage yield (APY): Your APY determines how much interest your savings will earn. It’s calculated as an annual percentage.
  • Timeline: Short-term goals are generally goals you’d like to achieve in one to three years. Enter your savings timeline in months or years to estimate your balance.



Years
Months

*Compounded monthly

What Are Short-Term Financial Goals?

The definition of a short-term financial goal varies, but in general, it is a goal you’d like to meet within one to three years. Potential short-term savings goals could include saving for a vacation, building a $1,000 emergency fund, repaying a credit card balance or saving for a specific purchase like a new phone, laptop or small appliance.

Your short-term objective could be a steppingstone to a bigger financial goal, such as growing an emergency fund with six months’ worth of savings, or it could be a once-and-done purchase or event.

What Savings Accounts Are Best For Short-Term Goals?

When it comes to saving for a short-term financial goal, you have a few savings account options. Comparing rates, terms and other features can help you choose the best account for your situation. Below are some of the best short-term savings options.

Note that all of these options typically carry Federal Deposit Insurance Commission (FDIC) insurance on balances up to $250,000. This insurance protects you in the rare case of a bank failure.

Certificates of Deposit (CDs)

A CD account is a type of account that requires you to deposit your savings for a specific term. In exchange for the privilege of holding your money, your bank offers you a fixed savings rate for the duration of your CD’s term. CDs offer the benefits of safety and predictable interest earnings, and they often come with higher rates than traditional savings accounts.

While certain CD accounts have long terms, others come with terms as short as a few months. Find a term that best aligns with your timeframe for achieving your short-term savings goal.  

It’s important to note that CDs often have early withdrawal penalties, which can amount to a few months of interest. For this reason, it’s important to deposit only what you can afford to invest in a CD and avoid withdrawing money before your term is up.

Money Market

If you’re concerned that a CD doesn’t offer enough flexibility, consider a money market account instead. This type of account is a secure hybrid between a checking and savings account, and it typically offers a generous rate. Unlike CDs, money market accounts offer easy access to your balance. If you need to withdraw money sooner than you anticipated, you won’t need to worry about early withdrawal penalties.

Certain money market accounts come with tiered rates depending on balance, and some may also have minimum initial deposit requirements. These accounts often come with monthly transaction limits, similar to what you might see with a traditional savings account. Comparing rates, features and account requirements can help you choose the money market account that best meets your needs.  

Traditional Savings Accounts

You can also opt for a traditional savings account as an alternative to a CD or money market account. Similar to a money market account, a traditional savings account gives you flexible access to your money. Your funds are not locked up for a set term, and there are no penalties for withdrawing money sooner than expected.

Traditional savings accounts offer the benefits of security and accessibility. While these benefits are valuable, many traditional savings accounts offer a lower rate than you’d get with a CD or money market account. For this reason, a short-term CD or money market account could be a better alternative if you’re saving for a short-term goal.

Short-term Savings FAQs

What are short-term savings for?

You could use short-term savings for lots of personal goals, including building your emergency fund; paying off a loan or credit card balance; saving for a vacation or paying for a new smartphone, laptop or other purchase. A short-term savings calculator can help you estimate how much you’ll need to set aside regularly to meet your objective. 

How long would you save for a short-term goal?

There’s not one specific timeframe for saving for a short-term financial goal. Instead, your timeframe will depend upon your unique financial situation and how much and how often you plan to set money aside. In general, though, short-term goals are objectives you’d like to accomplish within one to three years.

What account is best for short-term savings?

While money market, CD and traditional savings accounts can all be used for short-term financial goals, the best option for you depends on your preferences and goals. Comparing savings options can help you decide on the right account for your situation.

Opening a money market account could be the right choice if you want flexible access to your funds and a generous rate. But a CD could be a better alternative if you’re comfortable investing your money for a set term and want a fixed rate. Traditional savings accounts are also a secure option for your money, though they tend to offer lower rates.