Skip to content
Finance Calc Kit
Savings

Sinking Fund Calculator

Calculate the periodic savings deposits required to reach a future financial goal using our free sinking fund calculator.

$
%
years

Required monthly deposit

$305.10

Deposit $305.10 monthly for 10 years at 6.0% to reach $50,000.00.

Total principal saved

$36,612.30

73.2% of fund

Total interest earned

$13,387.70

26.8% of fund

Invested vs interest earned

Future value$50,000.00
  • Total principal saved$36,612.3073.2%
  • Interest earned$13,387.7026.8%

How your sinking fund is calculated

Periodic deposits with compound interest using the future value of an ordinary or annuity due payment stream.

  1. Periodic interest rate and total compounding periods

    r=APRm=6%12=0.5000%,n=10×12=120r = \frac{\text{APR}}{m} = \frac{6\%}{12} = 0.5000\%, \quad n = 10 \times 12 = 120

    Over 10 years with monthly compounding, there are 120 total periods at a periodic rate of 0.5000%.

  2. Solve for required periodic deposit

    PMT=FV×r(1+r)n−1=$305.10PMT = \frac{FV \times r}{(1 + r)^{n} - 1} = \$305.10

    Payments occur at the end of each period. The required monthly deposit is $305.10.

  3. Principal contributions versus compound interest

    Interest=FV−Principal=$50,000.00−$36,612.30=$13,387.70\text{Interest} = FV - \text{Principal} = \$50,000.00 - \$36,612.30 = \$13,387.70

    You contribute $36,612.30 in deposits while compound interest adds $13,387.70 toward the $50,000.00 target.

Fund growth schedule

First 120 periods showing deposits, interest earned, and running balance.

PeriodDepositInterestBalance
1$305.10+$0.00$305.10
2$305.10+$1.53$611.73
3$305.10+$3.06$919.89
4$305.10+$4.60$1,229.59
5$305.10+$6.15$1,540.84
6$305.10+$7.70$1,853.65
7$305.10+$9.27$2,168.02
8$305.10+$10.84$2,483.96
9$305.10+$12.42$2,801.49
10$305.10+$14.01$3,120.60
11$305.10+$15.60$3,441.30
12$305.10+$17.21$3,763.61
13$305.10+$18.82$4,087.53
14$305.10+$20.44$4,413.07
15$305.10+$22.07$4,740.24
16$305.10+$23.70$5,069.04
17$305.10+$25.35$5,399.49
18$305.10+$27.00$5,731.59
19$305.10+$28.66$6,065.35
20$305.10+$30.33$6,400.78
21$305.10+$32.00$6,737.89
22$305.10+$33.69$7,076.68
23$305.10+$35.38$7,417.17
24$305.10+$37.09$7,759.35
25$305.10+$38.80$8,103.25
26$305.10+$40.52$8,448.87
27$305.10+$42.24$8,796.22
28$305.10+$43.98$9,145.30
29$305.10+$45.73$9,496.13
30$305.10+$47.48$9,848.71
31$305.10+$49.24$10,203.06
32$305.10+$51.02$10,559.18
33$305.10+$52.80$10,917.08
34$305.10+$54.59$11,276.76
35$305.10+$56.38$11,638.25
36$305.10+$58.19$12,001.54
37$305.10+$60.01$12,366.65
38$305.10+$61.83$12,733.59
39$305.10+$63.67$13,102.36
40$305.10+$65.51$13,472.98
41$305.10+$67.36$13,845.44
42$305.10+$69.23$14,219.77
43$305.10+$71.10$14,595.97
44$305.10+$72.98$14,974.06
45$305.10+$74.87$15,354.03
46$305.10+$76.77$15,735.90
47$305.10+$78.68$16,119.68
48$305.10+$80.60$16,505.38
49$305.10+$82.53$16,893.01
50$305.10+$84.47$17,282.58
51$305.10+$86.41$17,674.10
52$305.10+$88.37$18,067.57
53$305.10+$90.34$18,463.01
54$305.10+$92.32$18,860.43
55$305.10+$94.30$19,259.83
56$305.10+$96.30$19,661.23
57$305.10+$98.31$20,064.64
58$305.10+$100.32$20,470.07
59$305.10+$102.35$20,877.52
60$305.10+$104.39$21,287.01
61$305.10+$106.44$21,698.55
62$305.10+$108.49$22,112.14
63$305.10+$110.56$22,527.81
64$305.10+$112.64$22,945.55
65$305.10+$114.73$23,365.38
66$305.10+$116.83$23,787.31
67$305.10+$118.94$24,211.35
68$305.10+$121.06$24,637.51
69$305.10+$123.19$25,065.80
70$305.10+$125.33$25,496.23
71$305.10+$127.48$25,928.81
72$305.10+$129.64$26,363.56
73$305.10+$131.82$26,800.48
74$305.10+$134.00$27,239.58
75$305.10+$136.20$27,680.88
76$305.10+$138.40$28,124.39
77$305.10+$140.62$28,570.12
78$305.10+$142.85$29,018.07
79$305.10+$145.09$29,468.26
80$305.10+$147.34$29,920.71
81$305.10+$149.60$30,375.41
82$305.10+$151.88$30,832.39
83$305.10+$154.16$31,291.66
84$305.10+$156.46$31,753.22
85$305.10+$158.77$32,217.08
86$305.10+$161.09$32,683.27
87$305.10+$163.42$33,151.79
88$305.10+$165.76$33,622.65
89$305.10+$168.11$34,095.87
90$305.10+$170.48$34,571.45
91$305.10+$172.86$35,049.41
92$305.10+$175.25$35,529.76
93$305.10+$177.65$36,012.51
94$305.10+$180.06$36,497.68
95$305.10+$182.49$36,985.27
96$305.10+$184.93$37,475.30
97$305.10+$187.38$37,967.78
98$305.10+$189.84$38,462.72
99$305.10+$192.31$38,960.13
100$305.10+$194.80$39,460.04
101$305.10+$197.30$39,962.44
102$305.10+$199.81$40,467.35
103$305.10+$202.34$40,974.79
104$305.10+$204.87$41,484.77
105$305.10+$207.42$41,997.30
106$305.10+$209.99$42,512.38
107$305.10+$212.56$43,030.05
108$305.10+$215.15$43,550.30
109$305.10+$217.75$44,073.16
110$305.10+$220.37$44,598.62
111$305.10+$222.99$45,126.72
112$305.10+$225.63$45,657.46
113$305.10+$228.29$46,190.85
114$305.10+$230.95$46,726.90
115$305.10+$233.63$47,265.64
116$305.10+$236.33$47,807.07
117$305.10+$239.04$48,351.21
118$305.10+$241.76$48,898.07
119$305.10+$244.49$49,447.66
120$305.10+$247.24$50,000.00
Report tool

What is a sinking fund and why plan one?

A sinking fund is a disciplined savings plan where you make equal periodic deposits into an account that earns compound interest until a known future liability or goal is fully funded. Corporations use sinking funds to retire bonds; households use them for car replacements, vacation funds, property tax reserves, and wedding budgets.

Unlike a generic savings projection, a sinking fund calculator solves for the exact periodic payment needed to hit a fixed future target. If you already know your monthly contribution and want to see what it grows into, try the savings calculator. For beginning-of-period SIP deposits toward an investment goal, use the goal SIP calculator. To explore compounding mechanics in depth, see the compound interest calculator.

Sinking fund formulas

Convert the annual interest rate to a periodic rate by dividing by compounding periods per year (mm). For monthly deposits with monthly compounding,r=APR/12r = \text{APR} / 12.

When deposits occur at the end of each period (ordinary annuity), the future value of equal payments is:

FV=PMT×(1+r)n−1rFV = PMT \times \frac{(1 + r)^{n} - 1}{r}

Rearranging to solve for the required periodic deposit gives the classic sinking fund payment formula:

PMT=FV×r(1+r)n−1PMT = \frac{FV \times r}{(1 + r)^{n} - 1}

When deposits are made at the beginning of each period (annuity due), each payment earns one extra compounding interval. Multiply the ordinary annuity factor by (1+r)(1 + r):

PMT=FV×r[(1+r)n−1]×(1+r)PMT = \frac{FV \times r}{\left[(1 + r)^{n} - 1\right] \times (1 + r)}

Solving for time or interest rate

To find how many periods are needed, rearrange the future value equation:

n=ln⁡(1+FV×rPMT)ln⁡(1+r)n = \frac{\ln\left(1 + \frac{FV \times r}{PMT}\right)}{\ln(1 + r)}

There is no closed-form solution for the interest rate when other variables are fixed. The calculator uses numerical iteration (Newton-Raphson) to find the annual rate that equates deposits and compound growth to your target balance.

Worked example: monthly sinking fund

You need $50,000 in 10 years for a home repair reserve and expect 6% annual interest compounded monthly. The periodic rate is 0.5% and there are 120 monthly periods. Applying the ordinary annuity sinking fund formula:

PMT=50,000×0.005(1.005)120−1≈$305.10PMT = \frac{50{,}000 \times 0.005}{(1.005)^{120} - 1} \approx \$305.10

Over 120 months you contribute about $36,612 in principal. Compound interest contributes roughly $13,388, bringing the fund to $50,000. The invested versus interest split helps you see how much of the target comes from your own deposits versus growth.

Ordinary annuity vs annuity due

  • Ordinary annuity (end of period): Typical for automatic transfers that settle after a pay period closes, such as end-of-month bank transfers.
  • Annuity due (beginning of period): Matches deposits made on the first day of each month before interest accrues. Required payments are slightly lower because each dollar compounds longer.

Practical planning tips

  1. Name the fund and automate transfers on payday so the deposit happens before discretionary spending.
  2. Match the compounding frequency in the calculator to how your account actually credits interest (monthly for most high-yield savings accounts).
  3. Use a conservative rate for short horizons and a moderate long-run return assumption only when the money is invested in diversified assets with acceptable risk.
  4. Revisit the plan annually. If rates rise or your target date moves, recalculate the required deposit rather than guessing.

Frequently asked questions

What is the difference between a sinking fund and an emergency fund?
An emergency fund covers unexpected expenses and is sized for liquidity, often three to six months of expenses. A sinking fund is goal-specific with a known future amount and date, such as $15,000 for a car down payment in three years. Both use periodic saving, but the sinking fund math targets an exact future balance.
Why does payment timing change the required deposit?
Beginning-of-period deposits (annuity due) earn interest for the full period they are invested. End-of-period deposits (ordinary annuity) miss that first interval of growth. Annuity due payments are therefore slightly smaller for the same future value target.
Can I use quarterly or annual deposits instead of monthly?
Yes. Select the deposit frequency that matches your plan. Fewer deposits per year means each individual payment is larger because each installment has fewer compounding intervals to grow.
What interest rate should I assume?
For cash reserves in FDIC-insured savings, use your bank current APY. For longer goals invested in balanced portfolios, many planners use a conservative real return estimate and stress-test with a lower rate to avoid under-saving.
How is this different from the goal SIP calculator?
The goal SIP calculator models beginning-of-period mutual fund contributions (annuity due) and can account for existing starting savings. The sinking fund calculator defaults to end-of-period deposits (ordinary annuity), which is standard for bond sinking funds and many bank savings schedules.
Are my inputs saved on a server?
No. All calculations run locally in your browser. Changing inputs updates the page URL so you can bookmark or share your scenario.

Resources and references

The formulas and methods in this calculator were checked against these independent sources.