Savings goals in Monarch now factor in expected investment growth and interest when calculating your progress, projections, and recommended contributions. With growth rates, long-term goals like retirement or education savings reflect what your money is actually doing — not only what you're directly contributing.
New to Goals? Check out Using Save Up Goals to get started before diving into growth rates.
Table of Contents
- What are growth rates?
- How growth rates work
- Setting up growth rates
- How growth rates affect your goals
- Budgeting with growth rates
- Frequently asked questions
What are growth rates?
Growth rates represent the expected annual return on an account — for example, the interest earned on a savings account or the average return on an investment portfolio.
When an account’s entire balance is used towards a goal, Monarch uses compound interest to project how your money will grow over time. This means:
- More accurate projections. Your timeline chart reflects expected returns, not just contributions.
- Smarter recommended contributions. Monarch factors in growth when calculating how much you need to save each month, so you're not over-saving.
- Realistic goal statuses. Your on track, ahead, and at risk statuses account for expected growth, giving you a truer picture of where you stand.
This is especially impactful for long-term goals like retirement, education savings, or any goal funded by investment accounts.
How growth rates work
Account-level setting
Growth rates are set at the account level, not the goal level.
Each account type has a default growth rate:
| Account Type | Default Annual Growth Rate |
|---|---|
| Checking | 0% |
| Savings | 3% |
| Investment | 7% |
You can customize the growth rate for any account to match your actual expected return.
When growth rates apply
Growth rates apply to accounts that are set to Use entire balance and future activity for a goal. If you're partially contributing to a goal from an account (without using the entire balance), the growth rate for that account won't be factored in.
When an account uses the entire balance for a goal, the growth rate is automatically applied and cannot be turned off for that account-goal combination.
The math behind it
Monarch uses compound interest to project growth. The annual growth rate is converted to a monthly rate using the compound interest formula, then applied month over month to project future balances.
For each account linked to a goal with growth rates enabled, Monarch calculates:
- How much your existing balances will grow to by the target date through compounding alone.
- How much your planned contributions will grow as each monthly deposit earns returns over time.
- How much you still need to contribute after accounting for expected growth — which is often significantly less than without growth rates.
Setting up growth rates
During goal creation
- When creating a save up goal, proceed to the Contributions step.
- Select the accounts you'd like to link to your goal. For accounts where you toggle Use entire balance and future activity, the growth rate will automatically be applied.
- You'll see each account's current growth rate displayed. To change it, tap the growth rate value and enter your preferred annual rate.
- Continue to the Budget step. You'll notice the recommended monthly contribution now accounts for expected growth — it may be lower than you'd expect!
Tip: When you change the planned contribution for one account, the recommended contribution for other accounts updates automatically to reflect the change.
In goal settings
For existing goals:
- Open the goal you'd like to update.
- Click Manage in the top navigation.
- Select Edit goal details.
- In the monthly planned contributions section, adjust your planned contributions and the growth rate per account as needed.
How growth rates affect your goals
Recommended monthly contribution
With accounts using the entire balance towards a goal, Monarch calculates your recommended monthly contribution by:
- Projecting how much all previous contributions will grow on their own through compounding.
- Accounting for what other accounts are already set to contribute monthly, including the growth on those contributions.
- For each account, calculating the monthly contribution needed if contributions from other accounts remain unchanged.
This often results in a lower recommended contribution than without growth rates, because Monarch accounts for the returns your money will earn along the way.
Goal status
Your goal status (on track, ahead, at risk, complete) includes expected growth when determining whether you'll reach your target by the target date.
Timeline projection
The projection line on your goal's timeline chart will reflect compounding growth. This gives you a more realistic view of your path to the finish line.
Retirement and education goals
With growth rates enabled, retirement and education goals now support target dates, goal statuses, and recommended contributions — features that were previously unavailable for these goal types because projections would have been inaccurate without accounting for investment growth.
Budgeting with growth rates
When growth rates are enabled, your budget for a goal may show multiple inputs — one for each account using the entire balance, plus a line for any extra contributions from other accounts. You can contribute to one, or a combination, to reach your goal targets.
The total budget amount shown on the Budget screen is the sum of all these values. You can edit the contribution for each account individually.
Note: Growth rates don't apply to the general contributions bucket — only to accounts using the entire account balance.
Frequently asked questions
Do I need to know my exact growth rate?
No. Monarch provides sensible defaults (0% for checking, 3% for savings, 7% for investments) based on typical returns. You can adjust these anytime if your accounts have different expected returns. Even an approximate rate will give you much better projections than not using growth rates at all.
Why don't growth rates apply to partial contributions?
For now, growth rates only apply when you're using the entire account balance for a goal. If you're making partial contributions from an account, we don't apply its growth rate to those contributions. We may expand this in a future update.
What about the current month — does growth apply right away?
Monarch assumes the best-case scenario for the current month. If you haven't contributed the full budgeted amount yet, Monarch assumes you will before the month ends. The same principle applies to expected returns — growth for the current month is included in projections.
How does Monarch calculate compound growth?
Monarch converts your annual growth rate to a monthly rate using compound interest — not simple division. The monthly rate is calculated as: (1 + annual rate) ^ (1/12) - 1. This is then applied month over month to give you accurate compounding projections.
Can I use growth rates with pay down goals?
Growth rates apply to save up goals only. Pay down goals use APR and interest rates, which are handled separately in the debt payoff projection.