Calculate how much you need to set aside regularly to reach a savings goal. Enter your savings goal, current savings, annual interest rate, time period, and compounding frequency — and the Sinking Fund Calculator returns your required periodic deposit, total contributions, and total interest earned.
Required Periodic Deposit
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Total Contributions
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Interest Earned
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Total Periods
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A sinking fund is a dedicated savings pool where you regularly set aside money to meet a future financial obligation or goal. Unlike an emergency fund, a sinking fund targets a specific, known expense — like a car purchase, home repair, or bond maturity — so you're prepared when the time comes.
The standard sinking fund formula is PMT = FV × i / ((1 + i)^n − 1), where FV is the future value (savings goal), i is the interest rate per period, and n is the total number of periods. This tells you the fixed deposit needed each period to reach your goal, assuming compound interest.
More frequent compounding means interest accumulates faster, which reduces the deposit you need to reach the same goal. For example, daily compounding will result in a slightly lower required payment than annual compounding for the same target amount and timeframe.
You can enter your current savings in the 'Current Savings' field. The calculator subtracts the future value of your existing savings (grown at the same interest rate) from your total goal, so your required periodic deposit is only calculated on the remaining amount.
A savings account is a general-purpose account, while a sinking fund is purpose-driven — you allocate a fixed amount each period toward a specific goal with a defined deadline. Sinking funds help businesses and individuals avoid large lump-sum payments by spreading costs over time.
Yes. Businesses commonly use bond sinking funds to set aside money each year to repay bond holders at maturity. By contributing regularly, a company reduces the risk of a large one-time cash outflow, improves its credit rating, and demonstrates financial responsibility to investors.
Missing a payment means your accumulated balance will fall short of the target at the end of the period. You would either need to increase future deposits to make up the difference, extend your timeline, or accept a shortfall. Consistency is key to making a sinking fund work effectively.
Not exactly. A sinking fund accumulates money over time to pay off a future lump-sum obligation, while an amortization schedule spreads repayment of an existing debt across regular installments that include both principal and interest. Both involve regular payments but serve opposite directions of cash flow.