Project your future wealth with compound interest.
Use this free savings calculator to see how your money can grow over time. Enter your starting balance, regular monthly contributions, and interest rate (APY) to visualize the power of compound interest. Compare current savings account rates to find a competitive APY to plug in.
Compound Interest Calculator
Project your savings growth over time with monthly contributions.
| Year | Start Balance | Contributions | Interest | End Balance |
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How It Works
Compound interest is often called the "eighth wonder of the world" because of its ability to multiply wealth exponentially over time. Unlike simple interest, which is calculated only on the principal amount, compound interest is calculated on the principal plus the accumulated interest.
Key Definitions
- Principal: The money you deposit initially. This is the seed for your future growth.
- Monthly Contribution: The amount you add to your savings account every month. Regular contributions are the most powerful way to grow wealth over time.
- APY (Annual Percentage Yield): The real rate of return earned on your savings, taking into account the effect of compounding interest.
- Compounding Frequency: How often the bank pays you interest. Daily compounding grows faster than monthly or yearly compounding.
How to Use the Savings Calculator
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Enter your starting balance
Type in the amount you have saved today. If you're starting from scratch, leave it at $0 and rely on the monthly contribution field to show how regular savings build over time.
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Set your monthly contribution
Enter how much you plan to add each month. This is where most of the long-term growth comes from — consistent monthly saving matters more than picking a perfect starting amount.
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Enter the APY and compounding frequency
Use a realistic APY based on the savings account or CD you'll be using. For an online high-yield savings account in 2025, 4% to 5% is typical. Most savings accounts compound daily.
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Pick your time horizon
Enter the number of years you plan to save. Even small differences matter: 30 years of compounding produces dramatically more than 20 years, because the largest growth happens in the final decade.
Frequently Asked Questions
How accurate is this savings calculator?
This calculator provides a mathematical projection based on the inputs you provide. However, it assumes a fixed APY for the entire duration. In reality, bank rates fluctuate based on the Federal Reserve's benchmark rates — so use the calculator for directional planning, not exact dollar predictions.
What is the difference between APY and APR?
APR (Annual Percentage Rate) is typically used for loans and does not include compounding. APY (Annual Percentage Yield) is used for savings and investments and does include the effects of compounding. For savings accounts, always compare APY-to-APY — that's the apples-to-apples number.
Do I have to pay taxes on interest?
Generally, yes. In the United States, interest earned on bank accounts (savings, checking, CDs) is considered taxable income by the IRS. Banks send a 1099-INT each January if you earn $10 or more in interest. The interest is taxed as ordinary income at your marginal federal and state rate.
Is my money safe in an online savings account?
Yes, as long as the bank is a member of the FDIC (Federal Deposit Insurance Corporation). FDIC insurance protects your deposits up to $250,000 per depositor, per insured bank. Credit unions provide equivalent NCUA insurance. If you have more than $250,000, spread it across multiple insured institutions.
How does compounding frequency really impact my balance?
Less than people think, surprisingly. The difference between daily and monthly compounding on a 5% APY account is roughly 0.05% per year — a few dollars on $10,000. APY itself already bakes in the compounding frequency, so a 4.50% APY savings account beats a 4.40% APY account regardless of how each one compounds underneath.
Should I save in a regular savings account, HYSA, or CD?
For most savers, a high-yield savings account at an online bank is the right default — rates of 4% to 5% with full liquidity and no minimums. CDs may pay slightly more if you're willing to lock up the money. Try the CD vs. HYSA calculator to compare specific rate offers side-by-side.
What happens if I miss monthly contributions?
The calculator assumes you contribute every single month. In real life, missing a few contributions compounds against you over time — one missed month of $300 over 30 years at 5% costs you roughly $1,300 in final balance. Automating transfers from checking to savings on payday is the single most reliable way to keep contributions consistent.
How does inflation affect my real returns?
The calculator shows nominal growth (raw dollars). To see purchasing power in today's dollars, subtract expected inflation (historically around 2% to 3%) from your APY. For example, a 5% APY in a 3% inflation environment gives you roughly 2% in real terms. If you're saving long-term, you may want to consider the investment calculator for higher-return options that historically outpace inflation.
