Compound interest or "interest on interest," illustrates the power of growth of money on your savings. This tool calculates the interest earned on both the initial amount you have saved, as well as ongoing/recurring savings and the accumulated interest from previous periods. Compound interest is like a snowball rolling downhill - it grows bigger and bigger as it picks up more snow.
The longer interest is compounded the more your money grows. This is why starting to save early is so important - you give your money more time to benefit from compounding. Compound interest is a powerful tool for growing your wealth over time.
Our tool allows you to input both today’s savings, future savings and the interest you expect to earn.
Compound interest is "interest on interest" — you earn returns not just on the money you originally saved, but also on the interest that money has already accumulated. It's often compared to a snowball rolling downhill, growing faster as it picks up more snow.
It calculates interest earned on both your initial savings and any ongoing or recurring savings you add, compounding on the accumulated interest from previous periods. You provide today's savings, expected future contributions, and the interest rate you expect to earn.
The longer your money is compounded, the more it grows, because each period's interest gets added to the balance that earns interest in the next period. Starting early simply gives your money more time to benefit from that compounding effect.
A higher assumed interest rate compounds faster and produces a larger ending balance, especially over longer time horizons — small differences in rate can lead to meaningfully different outcomes the longer the money compounds.
The Budget Calculator can help you find money to save in the first place, and the Recurring Expense Calculator shows the flip side — what a recurring expense costs you in forgone compounding.