Sinking Fund Calculator
Find the monthly deposit to reach a savings goal.
Results update as you type.
How it works
The required monthly deposit shown here is the steady amount you would need to set aside each month to reach a specific savings goal by a target date, assuming your savings earn a given return along the way. It matters because most big financial goals — a down payment, a new car, a wedding, a replacement roof — have both a price tag and a deadline, and a sinking fund turns that pair into a concrete monthly habit rather than a vague intention. This sinking fund calculator reverses the future value of an annuity: instead of asking what a series of deposits grows into, it fixes the ending value and solves for the deposit that gets you there. It converts the annual return to a monthly rate and accounts for the fact that earlier deposits compound for longer than later ones, so the required amount is smaller than simply dividing the goal by the number of months. Savers use a sinking fund calculator to budget for planned expenses, to spread a large future cost into manageable pieces, and to see how a higher return or a longer timeline lightens the monthly load. Because the projection assumes a constant return, treat it as a disciplined plan and revisit it if your actual returns or timeline shift.
Deposit = goal × r ÷ [(1 + r)^N − 1], r = rate ÷ 1200, N = years × 12
The monthly rate r is the annual return divided by 1200, and N is the number of monthly deposits, or years times twelve. Rearranging the future value of an annuity to solve for the payment gives deposit = goal × r ÷ [(1 + r)^N − 1]. The bracketed term is how much a stream of one-dollar deposits would grow to over N months, so dividing the goal by it scales the deposit to hit exactly that target. When the return is zero the formula becomes goal ÷ N, a simple split, because there is no growth to help reach the goal.
Source:U.S. SEC — Investor.gov
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Worked example
How to use this calculator
- 1
Enter your values
Enter savings goal, annual return and years to save.
- 2
Adjust the options
Fine-tune any options to match your situation.
- 3
Read your result
Required monthly deposit updates instantly as you type — no button to press.
Frequently asked questions
What is a sinking fund?
A sinking fund is money you set aside gradually to pay for a specific, expected future expense — a car replacement, home repairs, a vacation or an insurance premium. Rather than being caught off guard by a large one-off cost, you spread it into small, regular deposits over the months or years leading up to it. Businesses use the same concept to save for bond repayments or major asset replacements, setting aside funds systematically toward a known obligation.
How does the expected return affect my deposit?
A higher assumed return means your savings grow faster, so you need to deposit less each month to reach the same goal. A lower return, or keeping the money in cash that earns almost nothing, means you must contribute more yourself. Because returns are uncertain, it is safer to assume a modest, realistic rate for money you will need on a fixed date, and to hold shorter-term goals in low-risk accounts rather than volatile investments.
How is a sinking fund different from an emergency fund?
A sinking fund targets a known, planned expense with a rough amount and date, so you can calculate exactly how much to save each month. An emergency fund covers unknown, unexpected events — a job loss, a medical bill, an urgent repair — and is typically sized as several months of living expenses rather than a specific goal. Both are useful; a sinking fund handles the predictable, while an emergency fund cushions the unpredictable.
Where should I keep a sinking fund?
For goals within a few years, favor safe, liquid places such as a high-yield savings account, a money market account or short-term CDs, where the balance will not fall just before you need it. For goals many years away, some savers accept more risk for higher returns, but the closer the deadline, the more the money should shift toward safety. Match the account's risk and access to how soon you will spend the funds.
What if I cannot afford the required monthly deposit?
If the calculated deposit is out of reach, you have three levers: extend the timeline so the cost spreads over more months, lower the goal amount, or seek a higher return by accepting more risk, which is rarely wise for near-term needs. Extending the deadline is usually the safest adjustment. Even saving a smaller amount than required still builds progress and reduces how much you must borrow or find later.