Secure Finance

Compound Interest Calculator

See exactly how your savings grow with the power of compounding. Enter your deposit, monthly contributions, rate, and time horizon �?results are instant.

Projected Savings Growth

Future Value$0
Total Contributions$0
Total Interest Earned$0

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How Compound Interest Works

Compound interest means you earn interest not just on your original deposit, but also on all the interest you've already earned. This creates an exponential growth curve �?the longer you leave money invested, the faster it grows.

The formula is: FV = P(1 + r)^n + PMT × [(1 + r)^n �?1] / r, where P is the initial deposit, r is the monthly rate, n is the number of months, and PMT is the monthly contribution.

The Rule of 72

A quick way to estimate doubling time: divide 72 by your annual rate. At 6%, your money doubles in about 12 years. At 8%, it doubles in 9 years. This rule shows why even small differences in return rate matter enormously over decades.

Why Starting Early Matters

Time is the most powerful variable in compound interest. Consider two investors who both contribute $300/month at 7% annual return:

  • Investor A starts at 25 and retires at 65: ~$798,000
  • Investor B starts at 35 and retires at 65: ~$378,000

That 10-year head start is worth over $400,000 �?from the same monthly contribution.

Best Accounts for Compound Growth

  • High-yield savings accounts (HYSA): Currently 4%�?% APY, FDIC insured.
  • 401(k) / IRA: Tax-advantaged growth; employer match is free money.
  • Index funds: Historically 7%�?0% average annual return (not guaranteed).
  • CDs: Fixed rate, FDIC insured, good for short-term goals.

Frequently Asked Questions

What is compound interest?

Compound interest is interest earned on both your principal and previously accumulated interest. It causes exponential growth �?the longer you invest, the faster your balance grows.

How often does this calculator compound?

Monthly compounding is used, which is standard for most savings accounts and investment accounts. Monthly contributions are added at the end of each period.

What is the Rule of 72?

Divide 72 by your annual interest rate to estimate how many years it takes to double your money. At 6%, that's 12 years. At 9%, it's 8 years.

What annual return should I use?

The S&P 500 has historically returned ~7%�?0% annually. For conservative planning, use 5%�?%. High-yield savings accounts currently offer 4%�?%. Always use realistic assumptions for your specific situation.

Does inflation affect compound interest?

Yes. To find your "real" return, subtract the inflation rate from your nominal rate. If your account earns 6% and inflation is 3%, your real purchasing power grows at roughly 3% per year.

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Educational purposes only. Not financial advice. Past returns do not guarantee future results. Formula sources: SEC Investor.gov.