Saving for a deposit, month by month
Working backwards from 20,000 in five years, starting with 1,000 already saved and a 4% return, the answer is a little over 280 a month. Your own contributions account for the great majority of it; the return adds roughly 2,000 over the period. That ratio is the useful part — over five years the rate barely matters and the monthly amount is almost everything, which is the opposite of a thirty-year picture.
Year by year
| 1 | $4,398.97 | $103.75 | $4,502.72 |
| 2 | $7,797.93 | $350.21 | $8,148.15 |
| 3 | $11,196.90 | $745.19 | $11,942.09 |
| 4 | $14,595.87 | $1,294.74 | $15,890.61 |
| 5 | $17,994.84 | $2,005.16 | $20,000.00 |
An estimate, not financial advice. Figures are illustrative and depend on assumptions listed below. Check anything you plan to act on with a qualified adviser or the provider itself.
The worked example below, drawn. The gap between the lines is what the return contributes rather than you.
Over short horizons, contributions dominate and the rate is close to irrelevant. Over long ones it reverses.
Money already saved compounds for the entire period, so it removes more from the monthly figure than its size suggests.
The monthly amount rises much faster than the time falls, because there are both fewer payments and less growth on each.
How it works
The formula
The future value of a starting sum plus a level
monthly payment, over n months at monthly rate i:
FV = P x (1+i)^n + M x ((1+i)^n - 1) / i
Solved for the payment:
M = (FV - P x (1+i)^n) x i / ((1+i)^n - 1)
At a rate of zero the annuity factor has the
limit n, so that branch is simply:
M = (FV - P) / n
i = annual rate / 100 / 12
n = years x 12
Contributions land at the end of each month:
an ordinary annuity.
What it assumes
- Contributions are paid at the end of each month, which is what a standing order set up after payday actually does. Paying at the start earns one extra month of growth on every contribution and lowers the required amount slightly.
- The return is constant and compounds monthly. Real returns are not constant, and a fixed deadline is exactly where that matters — a fall in the final year cannot be waited out.
- The rate is nominal and before inflation, tax and charges. A target set in today's money will buy less than you think by the time you reach it, which is the inflation tool's question.
- If the starting sum alone passes the target, the required contribution is clamped to zero rather than reported as a negative. The algebra's negative answer is the amount you could withdraw, which is a different question.
- The monthly figure is rounded to money before it is paid, as a standing order would be, so the final balance lands within a cent of the target rather than exactly on it.
- The figures carry no currency symbol on purpose. The arithmetic is the same in pounds, euros or dollars, and the tool follows whichever currency your locale uses.
Common questions
Should I use a cash rate or an investment return?
For anything within about five years, a cash savings rate, because a fall at the wrong moment cannot be waited out on a fixed deadline. Longer horizons can justify a higher assumed return, but the figure should be cautious: this tool computes exactly what you ask of it, and an optimistic rate produces a comfortable monthly amount and a shortfall at the end.
What if I cannot afford the monthly figure?
Three levers, and they are not equally effective. Adding time helps most, because it adds payments and growth together. Lowering the target helps proportionally. Raising the assumed return helps least over short periods and is the only one of the three that is a guess rather than a decision.
Sources
Method written and checked by Tessalor on Jul 31, 2026.
The full method, worked example and every assumption behind this figure are on Savings Goal Calculator.