What the calculator shows
Enter a starting amount, monthly contribution, years, effective annual return and inflation. The editable starting rate is a dated Bank of Canada typical posted one-year GIC rate, not a forecast or product quote.
Calculation method
The effective annual rate is converted to an equivalent monthly rate. Growth is applied before each month-end contribution. Today’s value discounts the future balance by the entered annual inflation rate.
Inputs to confirm
Replace the reference with the account’s stated effective yield or a documented scenario. Account for tax, fees, changing rates, product guarantees, contribution limits and withdrawals when comparing a real product.
Worked Canadian savings example
CA$10,000 initially plus CA$500 at each month end, at 2.70% effective annually for 10 years, produces CA$81,728.81. Of that, CA$70,000 is contributed and CA$11,728.81 is modeled growth; at 2% inflation the today’s-dollar result is CA$67,046.09.
| Change | Nominal result | Meaning |
|---|---|---|
| Higher contribution | Higher | More cash supplied |
| Higher steady rate | Higher | Scenario, not guarantee |
| Higher inflation only | Unchanged | Today’s value falls |
Read the GIC reference, effective rate and inflation separately
The model uses one effective annual rate for a steady monthly scenario. A posted GIC reference, a product quote and an investment return are not interchangeable.
Effective annual rate is converted to an equivalent month
The conversion preserves the annual rate after twelve modeled months. Growth occurs before each month-end contribution, so starting money has more time to compound.
Today’s dollars are a second calculation
Inflation does not reduce the nominal account balance. It discounts that future amount to a planning value, helping separate money growth from purchasing power.
Product conditions remain outside the projection
GIC term, compounding method, redemption limits, deposit insurance, changing rates, tax and account limits can all matter. Replace the dated reference with the specific product or scenario rate.
Primary sources
Bank of Canada — posted interest rates offered by chartered banks