How this calculator works
Compound interest means you earn interest on your interest. Each period the balance grows, so the next period starts from a larger base. Over long periods this snowball effect does most of the work, which is why starting early matters more than contributing a lot.
Use the monthly contribution field to see how regular deposits change the outcome, and compare monthly with daily compounding.
Formula
Balance after each month = previous balance × (1 + monthly rate) + contribution. Monthly rate = (1 + annual rate ÷ m)^(m ÷ 12) − 1, where m is the compounding periods per year.
Frequently asked questions
What is a high-yield savings account?
It is an online savings account that pays a much higher interest rate than a traditional bank account. Rates change with the market, so compare current offers.
What is the rule of 72?
Divide 72 by your annual return to estimate how many years it takes to double your money. At 8% it takes about 9 years.
Does compounding frequency matter much?
Only a little. Daily compounding at 5% yields about 5.13% a year versus 5.12% monthly. Return rate and time matter far more.
Are the results guaranteed?
No. Stock returns vary every year and are not guaranteed. Savings accounts and CDs pay a stated rate, but it can change. Treat the output as an illustration, not a forecast.