Why do monthly contributions make such a big difference?

Each monthly contribution starts compounding immediately. $200/month at 6% for 20 years grows to ~$92,000 — but your total contributions were only $48,000. The extra $44,000 is pure compounding. Time and consistency matter more than the size of the initial deposit.

What is the difference between APR and APY?

APR (Annual Percentage Rate) is the nominal rate before compounding within the year. APY (Annual Percentage Yield) reflects what you actually earn after compounding. A 6% APR compounded monthly gives an APY of 6.17%. Banks advertise APY for savings accounts and APR for loans. Enter whichever rate your bank states — this calculator treats it as the annual figure and compounds monthly.

Does this calculator work for all countries?

Yes. Compound interest math is universal. Enter your deposit amount in any currency, your local savings rate, and your time horizon. All calculations run in your browser — no external data, no tax assumptions, no internet connection required.

Is LoanCalc completely free?

Yes, completely free. No account required. No signup. No email collection. No premium features behind a paywall. The calculator and growth chart are fully accessible at no cost.

Free Compound Interest & Savings Calculator

Loan amount

$1,000$2,000,000

Annual interest rate

0.1%30%

Loan term

years

1 yr30 yrs

Typical 30-year US mortgageRates vary by lender and credit score.

Monthly payment

$1,896

30-year fixed mortgage

Principal

$300,000

Total interest

—

over 30 years total

Total cost

—

Payoff year

—

Principal —Interest —

Amortization schedule

Year-by-year breakdown of every payment.

Year	Starting balance	Principal paid	Interest paid	Ending balance

How loan payments are calculated

Every fixed-rate loan uses the same standard amortization formula.

M = P × [ r(1+r)ⁿ ] ÷ [ (1+r)ⁿ − 1 ]

MMonthly payment

PPrincipal

rMonthly rate

nTotal payments

How to lower your monthly payment

Larger down payment reduces the principal.
Longer term spreads payments over more months.
Lower rate saves significantly over the life of the loan.

Frequently asked questions about the savings calculator

Compound interest means you earn interest on your interest, not just your original deposit. A $10,000 deposit at 5% earns $500 in year one. In year two you earn 5% on $10,500 — an extra $25. Over 20 years this turns $10,000 into ~$26,500 without adding a cent. The more frequently interest compounds (daily vs monthly vs annually), the faster the balance grows.
Why do monthly contributions make such a big difference?
Each monthly contribution starts compounding immediately. $200/month at 6% for 20 years grows to ~$92,000 — but your total contributions were only $48,000. The extra $44,000 is pure compounding. Time and consistency matter more than the size of the initial deposit.
APR (Annual Percentage Rate) is the nominal rate before compounding within the year. APY (Annual Percentage Yield) reflects what you actually earn after compounding. A 6% APR compounded monthly gives an APY of 6.17%. Banks advertise APY for savings accounts and APR for loans. Enter whichever rate your bank states — this calculator treats it as the annual figure and compounds monthly.
Yes. Compound interest math is universal. Enter your deposit amount in any currency, your local savings rate, and your time horizon. All calculations run in your browser — no external data, no tax assumptions, no internet connection required. Results don't account for taxes on interest; check your local rules to estimate net returns.
Yes, completely free. No account required. No signup. No email collection. No premium features behind a paywall. The calculator and growth chart are fully accessible at no cost. LoanCalc is supported by display advertising: the calculator itself will always remain free.

Compound interest & savings growth calculator

See exactly how your savings or investment grows year by year with compound interest.

Initial deposit

$100$1,000,000

Monthly contribution

$0$10,000/mo

Annual return rate

0.1%30%

Investment period

years

1 yr50 yrs

S&P 500 historical average The US stock market has returned ~7% annually after inflation over the long term. Use 7% as a realistic baseline for diversified index funds. See live SPY price →

Future value

—

Total portfolio after 20 years

Total deposited

—

Interest earned

—

Growth multiple

—

Target year

—

Deposits —Growth —

Year-by-year growth

Balance at end of each year, split between your deposits and compound growth.

Refinance calculator

See how much you save by refinancing to a lower rate.

Current loan

Remaining balance

$1,000$2,000,000

Current interest rate

0.5%20%

Years remaining

years

1 yr30 yrs

New loan offer

New interest rate

0.5%20%

Closing costs

$0$20,000

Monthly savings

—

Per month with the new rate

Old payment

—

New payment

—

Break-even

—

Total savings

—

Enter your loan details to see if refinancing makes sense.

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Compound Interest & Savings: The Complete Guide

What is compound interest and why does it matter?

Compound interest is interest calculated on both the initial principal and the accumulated interest from all previous periods. This is fundamentally different from simple interest, which is only ever calculated on the original principal. Albert Einstein is often credited with calling compound interest "the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it."

The reason compound interest is so powerful is exponential growth. In the early years, the effect is subtle. But over 20, 30, or 40 years, the compounding effect becomes extraordinary — the bulk of your final wealth comes not from your contributions but from interest earned on interest earned on interest.

Daily vs monthly vs annual compounding — how it affects growth

The compounding frequency determines how often interest is calculated and added to the balance. More frequent compounding means slightly higher returns:

Annual compounding: Interest added once per year. Baseline rate.
Monthly compounding: Interest added 12 times per year. A 6% annual rate compounded monthly is equivalent to an effective annual rate of 6.168%.
Daily compounding: Interest added 365 times per year. A 6% rate compounded daily gives an effective rate of 6.183%. Marginally better than monthly.

For savings accounts and money market funds, monthly compounding is standard. High-yield savings accounts at online banks typically compound daily. The difference between monthly and daily compounding is small — the interest rate itself matters far more than compounding frequency.

The Rule of 72 explained

The Rule of 72 is a simple mental math shortcut: divide 72 by your annual return rate to estimate how many years it takes your investment to double in value.

At 4% (high-yield savings): 72 ÷ 4 = 18 years to double
At 7% (stock market average): 72 ÷ 7 = 10.3 years to double
At 10% (aggressive growth): 72 ÷ 10 = 7.2 years to double
At 12% (venture returns): 72 ÷ 12 = 6 years to double

The rule works in reverse too: if you want your money to double in 8 years, you need a rate of at least 72 ÷ 8 = 9% per year.

The cost of waiting: starting at 25 vs 35 vs 45

The single most powerful factor in savings is time. Consider investing $200 per month at a 7% annual return with no initial deposit:

Start age	End age	Years invested	Total contributed	Final value	Interest earned
25	65	40 years	$96,000	$528,000	$432,000
35	65	30 years	$72,000	$243,000	$171,000
45	65	20 years	$48,000	$104,000	$56,000

Starting at 25 instead of 35 costs only $24,000 more in contributions but generates $285,000 more wealth — a 12x return on that additional $24,000. The message is clear: start early, even with small amounts.

High-yield savings accounts vs index funds: typical rates

The return rate you choose in this calculator should reflect where you'll actually hold your savings:

Traditional savings account: 0.01–0.5% APY. Effectively loses value to inflation. Only suitable for emergency funds you need to access immediately.
High-yield savings account (online banks): 4–5% APY in a high-rate environment. FDIC insured. Excellent for emergency funds and short-term goals (1–3 years).
Money market accounts: 4–5% APY. Similar to HYSA with slightly different access terms.
Certificates of deposit (CDs): 4–5.5% APY with 6-month to 5-year lock-up. Higher rates for longer terms.
S&P 500 index fund: ~10% average nominal return (7% after inflation) historically. Not guaranteed. Best for goals 5+ years away. Subject to market volatility.
Total bond market fund: 3–5% historically. Lower volatility than stocks. Suitable for medium-term goals.

Also see: Refinance Calculator — the interest you save from refinancing a mortgage can be redirected into savings.