Rate assumptions
Interest Rate Assumptions for Savings Goals (Low/Base/High)
Your timeline depends on the rate you assume. Using a 0% baseline plus low/base/high scenarios is safer than betting on one number. Here’s how to set up those scenarios and test them in the calculator.
Published: December 22, 2025 · Updated: December 22, 2025 · By FinToolSuite Editorial
Open the calculator
Test a 0% baseline and low/base/high rate scenarios for your savings goal timeline.
Open the Savings Goal Timeline CalculatorQuick answer
For a “pure saving speed” baseline, set the rate to 0%.
If you include a rate, treat it as a scenario input, not a promise. Run low/base/high to see sensitivity.
See the math: savings goal timeline formula.
Disclaimer
Educational purposes only; not financial advice. Interest and returns vary and can change; investments can go down as well as up. Examples are illustrative; outcomes aren’t guaranteed. Fees, taxes, inflation, and rules vary by country and provider.
Why the assumption matters
- The rate affects how much growth is applied to your balance and contributions.
- Over longer timelines, small differences can compound into noticeable gaps.
- Actual rates and returns change over time; scenarios help you see a range.
Savings interest vs investment returns
Savings interest (concept)
Often steadier but can change. Depends on account, provider, and country. Useful for cash-like assumptions; still not fixed.
Investment returns (concept)
More variable and can be negative. Not guaranteed. May not suit short-term goals; scenarios help show sensitivity.
Scenario bands (choose your numbers)
Pick numbers you’re comfortable testing, not numbers you expect. Always include a 0% baseline.
| Scenario | Rate assumption | When it’s useful | Notes |
|---|---|---|---|
| Conservative | 0% (saving-only) or a cautious low figure you choose | Stress-test the timeline without relying on growth | Not guaranteed; rates can change |
| Base | A middle figure you’re comfortable modeling | Middle-of-the-road planning | Still illustrative; investments can fall |
| Optimistic | A higher figure for sensitivity testing | See how timelines shift if growth is higher | Not a promise; compare against the baseline |
Mini example (illustrative)
Goal £10,000, starting £2,000, £200/month, horizon around 3–5 years.
- Scenario A: 0% baseline to see pure saving speed.
- Scenario B: Low assumption you’re comfortable testing.
- Scenario C: Base assumption to bracket the range.
Compare how the time-to-goal shifts across scenarios. For exact outputs, use the tool: Savings Goal Timeline Calculator.
Apply the assumption in the calculator
- Start with 0% for a baseline.
- Add your low/base/high assumptions one at a time.
- Keep other inputs the same when comparing.
- If scenario saving is available, save each run; otherwise rerun manually.
Need a refresher? See how to use the calculator.
Common pitfalls
- Treating one assumption as guaranteed.
- Changing multiple inputs while comparing scenarios.
- Using long-term assumptions for short deadlines without stress-testing.
- Forgetting inflation on very long goals.
FAQ
What rate should I use for a savings goal?
There isn’t one right number. Use 0% as a baseline, then run low/base/high scenarios you’re comfortable testing.
Is 0% a valid assumption?
Yes. It shows pure saving speed without relying on growth.
Should I use savings interest or investment returns?
It depends on the scenario you want to test. Keep it illustrative, and remember investment returns can be negative.
What if rates change over time?
Rates can move. Scenario ranges help you see different paths rather than relying on one figure.
Do fees or taxes matter for the assumed rate?
They can lower net growth. Some people use a slightly lower rate to account for this.
Does compounding frequency matter?
Yes. A higher compounding frequency can increase modeled growth slightly. It’s part of the calculator’s formula.
Are the calculator results guaranteed?
No. Outputs are illustrative and depend on your inputs.
Where can I learn more about assumptions?
See average return assumptions explained for context and example ranges.
Run your scenarios
Run 0% plus low/base/high scenarios, then pick a timeline you can live with.
Open the Savings Goal Timeline Calculator