Compound interest calculator
Compounding is the reason a modest monthly deposit becomes a serious sum given enough time. Enter what you start with, what you add each month and the return you expect, and the calculator separates the money you put in from the money the money made.
How to use the compound interest calculator
- Enter your starting balance and the amount you add every month.
- Set the annual return and how many years you will keep going.
- Choose how often interest compounds — monthly is typical for savings accounts and index funds.
How it works
Each period the balance is multiplied by one plus the periodic rate, then the new deposit is added. Because the interest earned in one period earns interest in the next, growth is exponential rather than linear, and the curve steepens noticeably after year ten or so.
The two figures worth comparing are total contributions and interest earned. Early on, contributions dominate. At some point the interest line overtakes them, and that crossover is the whole argument for starting early. The growth multiple tells you how many times over your own money has multiplied.
Common questions
What return should I assume?
Use something defensible. A broad stock index has historically averaged roughly 7–10% before inflation over long periods; a savings account is usually far lower. The result is only as realistic as this input.
Does this account for inflation?
No. To see the result in today's buying power, subtract your expected inflation rate from the return — a 9% return with 4% inflation behaves like 5%.
Is this the same as SIP or a retirement calculator?
Effectively yes. A systematic investment plan is a fixed monthly contribution into a compounding balance, which is exactly what this models.