Interest added to the principal earns interest itself, so the balance grows exponentially and, over decades, can multiply your deposits.
Regular deposit of and initial, over with yearly return.
Switch on tax, fees and inflationUse your numbers in the investment calculatorThis assumes the same 5.5% above inflation every year. Real years go up and down, so your balance could end higher or lower.
From year 19 the interest earned is more than everything deposited.
At a real return: in today’s money
Year 30
Use the left and right arrow keys to move through the years.
The chart shows the balance over 30 years. The blue layers are the deposits, €46,000 in total; the orange and yellow layers on top are the interest, so the balance reaches €138,932.
Each year the interest is added to the balance, so the next year’s interest is worked out on a bigger amount: interest earns interest. That is why the yellow layer on top, interest on interest, bends upward while the blue layers, what you put in, rise at a steady pace.
What is compound interest?Illustration only, not investment advice or a prediction. Assumes a steady 5.5% a year; real returns vary.
In the first 10 years interest adds €10,918; in the last 10 years it adds €54,868.
Each row is one year: Deposits is everything put in so far, Interest everything earned so far, and Balance is the two together.
Think of each row as a yearly statement. Deposits only grows by what you add. Interest grows by bigger steps each year, because it is worked out on a balance that already holds the interest from earlier years.
What is compounding?
Spending €1,200 a month takes about €360,000, or about €243 a month from 30 to 60.
Under the 4% rule, €400,000 would pay about €1,333 a month.
With these numbers, the interest you have earned passes the total you paid in during year 19. From then on your money does more of the work than you do.
Before that point, most of your balance is your own money. After it, the curve bends upward because interest starts earning interest of its own. That bend is the whole idea of compounding.
Divide 72 by the yearly return to see roughly how long money takes to double. At 5.5%, that is about 13.1 years.
Your money earns a return, and that return is added to your balance, so next year it earns a return too. At first growth is slow, because most of the balance is money you put in. Over time the earnings on earlier earnings grow larger than your own deposits. With 1,000 to start and 200 a month at 10% a year, that happens in year 13, and after 30 years the balance is about 430,018, of which 73,000 is what you put in. The formula for one amount is A = P × (1 + r/n)^(n × t): starting amount P, yearly rate r, n compounding periods a year, t years. The methodology adds monthly deposits, fees and tax. Time matters most, as the worked examples show.
This page keeps three inputs: what you put away, what you start with and the yearly return, with interest added monthly. It answers the basic question of how savings grow. The compound interest calculator for investments adds everything that shapes a real investment: return presets for savings accounts, bonds and index funds, eleven compounding frequencies with the effective yearly rate, fund fees, tax on gains, inflation in today's money and a market risk band. The link under the result opens it with your numbers already filled in, so nothing has to be typed twice.
A quick way to estimate how long money takes to double: divide 72 by the yearly return in percent. At 10% that gives 7.2 years; the exact answer is about 7.27 years. At 7% the rule gives about 10.3 years, which is why a gift invested at birth keeps doubling for decades. The calculator shows the estimate for the return you choose.
No. The calculator runs in your browser and does not send your numbers to a server. They are kept in the page address, so a reload, bookmark or shared link shows the same plan. Anyone you send the link to can see the numbers in it. There is no sign-up and no cookies.
No. The calculator shows how money could grow under the assumptions you choose. It does not know your situation and does not recommend any product or decision. Real returns, fees and tax vary. For decisions about your own money, consider talking to a qualified, independent professional.
It depends on the return and on how long you keep going. With 1,000 to start and 200 a month at 10% a year for 30 years, you would put in 73,000 and end with about 430,018 before fees and tax, or about 205,008 in today's money at 2.5% inflation. A lower return gives a much smaller result, so try a few rates. For smaller amounts, see saving for a child with 100 a month from birth to 18 or what 5 a day becomes in 30 years. These are illustrations; real returns vary.
