Savings goal

What interest rate should I use for my savings calculation?

Use the current interest rate on your savings account or the rate you expect to earn on your investment. As of 2026, high-interest savings accounts in Australia are offering rates between 4% and 5.5% per year. Online savings accounts and term deposits typically offer better rates than transaction accounts. Check your bank's current rate before running your calculation.

How does compound interest help my savings grow?

Compound interest means you earn interest not just on your original deposit but also on the interest you've already earned. Over time this creates exponential rather than linear growth. The effect is modest over short periods but becomes very significant over 10, 20 or 30 years. Starting earlier — even with small amounts — has a bigger impact than starting later with larger amounts.

Is it better to save a lump sum or contribute monthly?

Both approaches benefit from compound interest, but regular monthly contributions have the advantage of dollar-cost averaging — you're not trying to time the market or find a large sum upfront. If you have a lump sum available, investing it immediately generally outperforms drip-feeding it over time in a rising market. For most people, a combination works best: invest any lump sums immediately and contribute regularly from income.

How much should I be saving each month?

A common benchmark is to save at least 20% of your after-tax income, following the 50/30/20 rule. However the right amount depends entirely on your goals, income and expenses. The most useful approach is to work backwards: decide on a specific goal (house deposit, emergency fund, travel fund), set a target date, and use this calculator to find the monthly contribution needed to get there.