Why compound interest is so powerful
With compounding, the interest you earn starts earning its own interest. In the early years growth looks slow because the balance is small. But as the balance climbs, the annual interest can eventually exceed what you contribute — that inflection point is where wealth really builds. The two biggest levers are time and the contribution amount, which is why starting early beats starting big.
How to use this calculator
Enter what you have today, what you can add each month, a realistic annual return, and how long you'll invest. The chart shows your end-of-year balance so you can see the curve steepen. Try extending the years by 10 — the difference is often dramatic.
Frequently asked questions
What is compound interest?
Compound interest is interest earned on both your original money and on the interest it has already earned. Over time this "interest on interest" snowballs, which is why investing early matters so much.
How often is interest compounded here?
This calculator compounds monthly, which matches how most investment accounts and savings products report growth. Contributions are also added monthly.
What return rate should I use?
Use a realistic long-term figure. Historically a globally diversified stock portfolio has returned roughly 6–8% per year after inflation, while savings accounts return far less. Lower is safer for planning.
Does this account for inflation or tax?
No. It shows nominal growth before tax and inflation. To see what the result is worth in today’s money, run the final figure through the Inflation calculator.
Last updated: June 2026