How the Sinking Fund Calculator works (with interest)

A sinking fund is a dedicated savings bucket for a future, known expense. Mathematically, it’s a future value problem: you want to reach a target amount by a specific deadline. This calculator turns your target and timeline into a simple “deposit plan” — weekly, biweekly, or monthly. If your money earns interest (APY), it can reduce the deposit you need, because your balance grows between contributions.

The calculator first converts your timeline into the number of contribution periods (n). Each frequency has a standard “periods per year” value: monthly = 12, biweekly = 26, weekly = 52. If you enter months, we convert months to years and multiply by periods per year. If you enter years, we multiply directly. The result is rounded to a whole number of periods so your plan maps cleanly to real deposits.

APY is an annual rate. To estimate interest earned each period, we convert APY to a per-period rate: r = (APY / 100) / periodsPerYear. Then we use the growth factor (1 + r)^n to model compounding over n periods. For sinking funds (often shorter-term), this approach is a practical planner estimate. If you want a conservative plan, enter a slightly lower APY.

In “Required contribution” mode, the calculator solves for the periodic deposit amount (PMT) that will reach your target future value (FV). Your starting balance (PV) and one-time deposit (L) are treated as money invested from the start, so they grow for the entire timeline: (PV + L) × (1 + r)^n.

Your periodic deposits form an ordinary annuity (deposits at the end of each period). The future value of an ordinary annuity is: PMT × (( (1 + r)^n − 1 ) / r). Combining everything gives:

• FV = (PV + L)×(1+r)^n + PMT×(( (1+r)^n − 1 ) / r)
• PMT = (FV − (PV + L)×(1+r)^n) / (( (1+r)^n − 1 ) / r)

If APY is 0% (so r = 0), the formula simplifies to “no-interest savings”: PMT = (FV − PV − L) / n. In other words, it becomes a straight line: you divide the remaining amount by the number of deposits.

In “Future value” mode, you enter your contribution amount. The calculator computes the ending balance:

• FV = (PV + L)×(1+r)^n + PMT×(( (1+r)^n − 1 ) / r)
• If r = 0: FV = PV + L + PMT×n

That’s useful when you’re asking: “If I can only save $X per week, what will I have by my deadline?” You can then adjust the timeline, the frequency, or add a one-time deposit to close any gap.

The calculator reports “interest earned” as: ending balance − (starting balance + one-time deposit + total contributions). This is an estimate — real accounts may pay interest daily and compound monthly, and rates can change — but it’s a helpful way to see how much of your goal comes from growth versus deposits.

Examples you can copy (and tweak)

You want $600 in 6 months, starting at $0, no interest, monthly deposits. That’s 6 periods, so the required contribution is: $600 ÷ 6 = $100/month.

You want $1,200 in 12 months, starting at $200, APY 4%, monthly deposits. Without interest, a quick estimate is (1200 − 200) / 12 ≈ $83.33/month. With interest, the required deposit is slightly lower because your balance earns a little growth each month.

You want $3,000 in 10 months, starting at $0, with a $500 one-time deposit, biweekly saving, APY 3.5%. That $500 grows for the whole timeline and also reduces the “gap” you need to fill. Many people find that adding an upfront deposit (bonus, tax refund, side hustle) makes the remaining plan feel dramatically easier.

Switch to Future value. If you can only save $50/week for 40 weeks at 4% APY, the calculator shows your ending balance. If it’s short of your goal, you can extend the timeline, increase the weekly amount, or add a one-time deposit — and immediately see the impact.

Many households run 3–8 sinking funds at once: “car maintenance,” “home repairs,” “holidays,” “subscriptions,” “kids activities,” “annual insurance,” etc. Each bucket has its own goal and due date. The easiest setup is to automate transfers into separate sub-accounts (or separate labeled “spaces” in your bank app).

How to make a sinking fund actually work

The math is the easy part — the habit is the real win. A sinking fund works best when the plan is simple, the deposits are automatic, and the “why” is visible. This page is designed for that: calculate → save → share.

• Name the fund. “New tires” is clearer than “savings.” Clear names reduce accidental spending.
• Pick a deadline you believe. If you set an unrealistic deadline, you’ll hate the deposit amount.
• Choose a frequency that matches your paycheck. Weekly or biweekly feels natural for many people.
• Automate deposits. The best plans require the least willpower.
• Review monthly. Costs change. If the goal amount changes, adjust your deposit before you fall behind.

• Extend the timeline: Even +2 weeks or +1 month can cut the per-period deposit.
• Add a one-time deposit: Put part of a bonus or refund into the fund to reduce ongoing contributions.
• Earn interest: Keeping the fund in a high-yield account may reduce the deposit slightly.

If the required contribution is uncomfortable, that’s useful information — it’s not a failure. It means the goal, deadline, or assumptions need to change. Try one adjustment at a time: increase timeline, reduce target, add a lump sum, or pick a lower-cost option. The calculator is a “tradeoff simulator”: every input is a lever.

Frequently Asked Questions

• What’s the difference between a sinking fund and an emergency fund?

  An emergency fund is for unpredictable emergencies (job loss, surprise repairs, medical bills). A sinking fund is for predictable future expenses you can plan for (insurance premiums, holiday gifts, routine maintenance). Many people keep both.

• Should I include interest (APY) or keep it at 0?

  If the money sits in a savings account that pays interest, include APY. If your rate could change or you want to be conservative, enter a lower APY or 0. The goal is a plan that still works if reality is slightly different.

• Weekly vs monthly — which is better?

  The math difference is usually small. The behavioral difference can be huge. Weekly/biweekly feels easier because the number is smaller and aligns with paychecks. Monthly is simpler if you budget monthly. Choose what you’ll actually do.

• Does this assume deposits at the start or end of each period?

  It assumes deposits at the end of each period (ordinary annuity). If you deposit at the start, you’ll end up slightly ahead. For planning, end-of-period is a common conservative default.

• What if I already have enough money to cover the target?

  In Required Contribution mode, if your starting balance plus one-time deposit already grows beyond the target, the calculator will show a required contribution of $0. That can happen if your goal is small or your timeline is long.

• Can I use this for annual bills like property taxes or insurance?

  Yes. That’s one of the best uses. Confirm the expected bill amount and due date, then automate contributions so the cash is ready. Consider rounding your deposit up slightly to build a buffer.

• Is the schedule preview a full amortization table?

  It’s a short preview (first 12 periods) designed for clarity and sharing. Your exact account may calculate interest daily, and your bank may compound differently. The preview is for pacing and sanity checks.