In these modern times, it’s nearly unthinkable to not have some sort of savings account. It doesn’t matter if you’re young or old, money can’t just lie around your house or sit in your wallet. Income is something that we all need if we want to win the daily fight for survival and savings accounts let us have some security for the future.
Savings accounts come in a lot of forms, a variety that you can choose from depending on your situation. For day-to-day expenses, the most common form is basic savings account which includes a lot of options including free checking. Of course, the recent economical crisis has caused a lot of the major banks to pull this particular option. Free checking accounts are also harder to factor into a savings account calculator.
Using Savings Account Calculators
A savings account interest calculator is an important tool when planning your future. Calculating interest and future earnings is very crucial when choosing which bank to put your money in. When comparing earnings and rates, a savings account rate calculator will ask you to input several factors that may affect the growth of your savings.
Some basic calculators merely ask for the amount of initial deposit and the interest rate offered. The result will be a straightforward answer of annual earnings from interest but will be limited to only that. A more comprehensive calculator, like a 401k calculator, will ask for several other inputs that will let it get more useful results for planning.
A few examples of inputs needed for a normal savings account calculator are: amount of money you want to save, years to save it, interest rate offered, and amount of initial deposit. Assuming that regular deposits won’t be a problem, a savings account calculator can tell you just how much money you’ll have to save per year in order to make your goal by the time you’ve reached the years you’ve inputted. It’s a very useful tool in order to make up a set schedule for your payments. Organization in financial planning is everything so finding a good calculator customizations you want should be one of your first priorities when saving for your future.
Savings account calculators are also useful for more than just a basic savings account. There are other kinds of savings accounts with interest rates and conditions that may be more complicated than your usual calculator can handle. Accounts like these can be Certificates of Deposit (CDs) or are in the area of money market investing. For CDs, savings account interest calculators are very useful in determining the interest you’ll earn according to deposit and term. It’s even possible to take into account possible penalty withdrawals should you allow for unforeseen circumstances. Money markets are more complicated since they’re usually composed of several small but steady investments in a lot of different financial instruments like treasury bills, bonds, and CDs. A savings account rate calculator will be very handy in computing compounded interest from those investments.
Another kind of savings account which can be handled by calculators is retirement accounts. There have been proposed tax free saving accounts but the best we have in America at the moment are IRAs, annuities, and 401K plans. As with a normal savings account, earnings from these kinds of account can also be comprehensively determined, even accounting for age, time of investment, and possible withdrawals. Planning with a savings account calculator will make things easier and keeps you on track for a comfortable future.