Sinking fund calculator
A sinking fund is money set aside in regular deposits for a known future cost, such as a roof, a vehicle or a loan to repay. Enter the target, the time you have and an interest rate. The calculator gives the deposit per period.
Runs in your browser: nothing you enter is sent anywhere.
How to use it
- Enter the target amount and what you already have.
- Enter the interest rate you expect and the time left.
- Choose how often and when you deposit.
How it works
- Rate per period i = annual rate ÷ deposits per year; n = complete deposit periods.
- Existing balance grows to balance × (1 + i)^n.
- Deposit = (target − that) × i ÷ ((1 + i)^n − 1); at 0% it is the gap ÷ n.
- Deposits at the start of the period are divided by (1 + i).
Worked example
A target of 10,000 in 12 months at 6% with monthly deposits at the end of each month: 10,000 × 0.005 ÷ (1.005^12 − 1) = 810.66 a month, with about 272 of interest. Depositing at the start of each month lowers it to 806.63.
Tips
- Use a cautious rate; a savings account rate can change.
- Raise the target for inflation if the cost will rise.
- Results are estimates, not financial advice.
Frequently asked questions
How is the deposit calculated?
The interest per period is the annual rate ÷ deposits per year. Your existing balance grows by itself; the deposit covers the rest: (target − balance × (1 + i)^n) × i ÷ ((1 + i)^n − 1). With no interest it is simply the gap divided by the number of deposits.
What changes if I deposit at the start of the period?
Each deposit earns one more period of interest, so the deposit is the end-of-period figure divided by (1 + i).
How is this different from the savings calculator?
This tool is built around a fixed target on a date, with a choice of monthly, quarterly or yearly deposits and deposit timing.
What if the time is not a whole number of deposit periods?
Only complete periods are counted: 14 months of quarterly deposits is 4 deposits.
Is this financial advice?
No. The rate is your assumption and may not be guaranteed. Inflation, taxes and fees are not included.