Question 1

How long does it take to save $20,000 for a down payment?

Accepted Answer

Saving $20,000 at $500/month with 4.5% APY takes about 37 months. At $800/month it's roughly 24 months. Use this calculator with your exact numbers.

Question 2

What interest rate should I use?

Accepted Answer

High-yield savings accounts currently offer 4–5% APY. Money market accounts range 4–5%. CDs can reach 5%+ for fixed terms. Index fund averages are ~7–10% but with volatility.

Question 3

Should I use a target amount or target date?

Accepted Answer

Use a target amount to find out how long it will take. Use a target date to find out how much you need to save monthly. Both are useful — the calculator supports both modes.

Question 4

Does compound interest make a big difference for savings goals?

Accepted Answer

For short goals (1-3 years), the difference is modest. For longer goals (5+ years), compound interest can meaningfully reduce the time or monthly contribution needed, especially at 4-5% APY.

Year	Interest	Balance
Yr 1	+$480	$17,480
Yr 2	+$1,534	$30,534
Yr 3	+$3,187	$44,187
Yr 4	+$5,468	$58,468
Yr 5	+$5,911	$60,000

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