Even though I am a little behind in my savings goal, I feel really confident that I will manage to save at least 20K in my emergency fund by the end of the year. So, I got to thinking… What would happen if I saved 20K EVERY YEAR, at various rates, for 10 years. Here’s what I figured out…
(I used the calculator located here at DinkyTown to calculate my answers.)
20K Per Year @ 4% For 10 Years= 250,766 dollars
20K Per Year @ 5% For 10 Years= 265,866 dollars
20K Per Year @ 6% For 10 Years= 282,090 dollars
20K Per Year @ 7% For 10 Years= 299,529 dollars
WOW! As you can see the rate of return can have a BIG influence on the balance, especially as time goes by! (I used a VERY simplified calculation for these amounts, entering a 20,000 dollar annual contribution, with interest compounding monthly. Amounts will vary depending on the time of contribution and how often interest is compounded. ING compounds interest DAILY and credits interest MONTHLY.)
If you are looking for an AWESOME resource which lists current rates from various banks, check out Bank Deals.