Child Savings Calculator

Estimate how much you'll save for your child by a target age.

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Enter your values and click Calculate

Starting a savings fund for a child is one of the most impactful financial decisions a parent or grandparent can make — the earlier contributions begin, the more compound interest magnifies the result. This calculator uses the future value of an annuity formula to project how a regular monthly contribution will grow over time, based on your assumed rate of return. Parents commonly use it to plan a college fund, targeting 18 years of contributions to cover tuition and living expenses. Grandparents use it to assess lump-sum or recurring gifts that will compound over a child's entire childhood. Financial advisers use it to illustrate the dramatic difference between starting at birth versus waiting five or ten years — a delay of even three years at 6% can reduce the final balance by 20% or more. The calculator separates the final total into principal contributed and interest earned, showing exactly how much of the outcome comes from your contributions versus compound growth. This breakdown helps families understand that with a long enough time horizon, the interest earned can exceed the total amount they ever deposited. The result assumes contributions are made at the end of each month and that the rate of return remains constant — both standard assumptions for long-term planning projections.

How It Works

The formula used is the future value of an ordinary annuity with monthly compounding: FV = PMT × ((1 + r)^n − 1) / r, where PMT is the monthly contribution, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of months (years × 12). The numerator (1 + r)^n − 1 represents the compounding growth factor minus 1, and dividing by r converts that growth into a monetary total. As a worked example: $100/month at 6% annual rate for 10 years gives r = 0.06 / 12 = 0.005 and n = 120. The growth factor is (1.005)^120 ≈ 1.8194. FV = 100 × (1.8194 − 1) / 0.005 = 100 × 163.88 = $16,388. Of that total, $12,000 came from contributions (100 × 120) and $4,388 came from interest — meaning compound growth added roughly 37% on top of what was deposited. If the rate is zero, the formula reduces to PMT × n, which is simple multiplication with no growth component.

Examples

College Fund
$200/month at 5% annual return for 18 years — a common target for parents starting at a child's birth.
Result: Approximately $68,676 saved, of which $43,200 was contributed and $25,476 came from interest.
Head Start Fund
$100/month at 6% annual return for 10 years — a grandparent's gift started at birth.
Result: Approximately $16,388 saved, with $12,000 contributed and $4,388 in compound interest.
Aggressive College Savings
$300/month at 6% for 15 years — higher contributions with a moderate return assumption.
Result: Approximately $87,357 saved, with $54,000 contributed and $33,357 from compound growth.

Frequently Asked Questions

What account should I use for child savings?
A 529 college savings plan offers significant tax advantages for education expenses in the US — contributions grow tax-free and withdrawals for qualified education costs are also tax-free. For more flexible goals, a custodial UGMA/UTMA account invests in the child's name and can be used for any purpose, though it lacks the tax benefits of a 529. Coverdell Education Savings Accounts are another option with lower annual contribution limits but slightly broader expense coverage.
What interest rate should I assume?
Broad US stock market index funds have historically returned roughly 7–10% annually before inflation, but past performance does not guarantee future results. A conservative planning assumption of 5–6% accounts for market variability and is commonly used by financial planners for long-term projections. If the fund is invested more conservatively in bonds or a savings account, a lower rate of 2–4% is more realistic.
Does this account for inflation?
No — the calculator shows nominal future value, not inflation-adjusted purchasing power. To account for inflation, use a 'real' rate of return by subtracting the expected inflation rate from your nominal rate. For example, if you expect 7% nominal returns and 3% inflation, enter 4% as your rate. This produces a result expressed in today's dollars, making it easier to compare against current college costs.

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