Compound Interest Calculator

See how much growth you can expect in your savings accounts by plugging a few numbers into the compound interest calculator.

Enter Your Information

How long do you plan to save and add to your account?

$

Balance in your savings account, certificate of deposit (CD), etc.

$

This is the amount you’ll add to savings each month.

%

Check the current federal funds rate to give you an idea.

Spoiler alert—sometimes it’s well below 1%. 1

Your Results

Estimated Savings Value

In 0 years, your savings could be worth:

$0

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  • Initial Balance

    $ 0

    0% of Total

  • Contributions

    $ 0

    0% of Total

  • Growth

    $ 0

    0% of Total

What if I...

  • Saved an extra $100 per month.

    Adds $100 a month in contributions, but creates

    $0

    in additional growth

  • Gave up daily coffee purchases.

    Adds $128 a month in contributions, but creates

    $0

    in additional growth

  • Gave up weekly restaurant visits.

    Adds $200 a month in contributions, but creates

    $0

    in additional growth

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This tool provides general guidelines about investing topics. Your situation may be unique. If you have questions, connect with a SmartVestor Pro.

Common Questions and Answers

A compound interest calculator is a handy tool that can help you estimate how much your savings or investments can grow over time. While we won’t delve into the complexities of the compound interest formula, here’s a super basic example of how it works:

  • Imagine you invested $100 into a mutual fund with a 10% average annual rate of return.
  • At the end of the first year, you’d have your original $100 plus the $10 extra dollars you’d earned.
  • The next year, instead of earning 10% of $100, you’d earn 10% of $110.

The bottom line is that compounding happens when you earn interest on both your original investment and the interest it’s already earned. When compounded continuously over the years, a little money can turn into a lot more money.

As a general guideline, we suggest you start investing when you’ve paid off all debt (except for your mortgage) and have 3–6 months of living expenses saved up in an emergency fund.

At that point, we recommend using tax-advantaged retirement accounts to invest 15% of your annual household income. The historic average annual return of the stock market over a period of about 30 years is around 10–12%. Savings accounts tend to offer a much lower return—some even less than 1% a year.

If you have access to an employer-sponsored retirement account, investing can be as simple as setting up automatic contributions. You can choose to have a portion of each check automatically invested in the funds of your choice.

Or you can open an individual retirement account like a Roth IRA on the website of any major brokerage. As a general rule, we recommend working with a financial advisor, who will be able to help you select and set up the right account for your needs.

Investing may sound complicated, but it doesn’t have to be! Want to learn what you need to know to invest with confidence—all in plain, jargon-free English? Check out a free copy of Ramsey’s Complete Guide to Investing.

This content provides general guidelines about investing topics. Your situation may be unique. If you have questions, connect with a SmartVestor Pro.