Compound interest calculator
Calculate the future value of a US savings or investment account with monthly contributions, configurable APY, and a year-by-year breakdown of what comes from deposits vs interest.
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Growing at 4.5% APY, with monthly compounding on your balance and contributions. Interest earned is 23.1% of the final balance.
Year-by-year
| Year | Deposited (cum.) | Interest (cum.) | Balance |
|---|---|---|---|
| 1 | $16,000.00 | $595.27 | $16,595.27 |
| 2 | $22,000.00 | $1,487.32 | $23,487.32 |
| 3 | $28,000.00 | $2,689.52 | $30,689.52 |
| 4 | $34,000.00 | $4,215.81 | $38,215.81 |
| 5 | $40,000.00 | $6,080.79 | $46,080.79 |
| 6 | $46,000.00 | $8,299.69 | $54,299.69 |
| 7 | $52,000.00 | $10,888.44 | $62,888.44 |
| 8 | $58,000.00 | $13,863.69 | $71,863.69 |
| 9 | $64,000.00 | $17,242.82 | $81,242.82 |
| 10 | $70,000.00 | $21,044.02 | $91,044.02 |
How this calculator handles compounding
Compound interest is the mechanism by which interest earned in one period itself starts earning interest the next period. The math is mechanical: each month, the balance grows by the monthly rate (APY ÷ 12), the contribution is added, and the cycle repeats. Over short horizons the effect is small enough that linear approximations work. Over decades the effect dominates everything else and is the reason early-career retirement contributions outperform late-career catch-up contributions by a substantial margin.
The calculator above compounds monthly and adds the monthly contribution at the start of each month, before interest accrual on that month. This matches the typical retail experience at US deposit accounts and at brokerage cash sweeps: money posted on the first of the month earns interest for the full month. The year-by-year table shows the running totals of deposits, cumulative interest, and ending balance — so you can see exactly when interest starts to exceed deposits (the inflection point most people care about).
When the result holds — and when it does not
The calculator gives you a clean projection conditional on the inputs being right. In a HYSA scenario where the APY is currently 4.5% and rates over the next 10 years stay broadly similar, the projection is reasonably accurate. In a scenario where rates fall by 200 basis points and you keep your money in the same account that mechanically tracks rate moves, the actual result will be substantially below the projection. The single biggest source of error in any compound-interest projection is variable-rate exposure that the model treats as fixed.
For investment accounts, the input field labeled "Expected APY" is doing heavy lifting. A 7% return assumption is plausible as a long-run nominal equity return over 30+ years; a 7% return assumption over the next 7 years is a guess that could easily be off by several percentage points in either direction. The sensitivity of the terminal balance to the rate assumption is enormous: at $500/month over 30 years, the difference between 5% and 7% returns is roughly $200,000 in final balance. Run the calculator at multiple input rates to see how much your plan depends on getting the rate right.
What this calculator deliberately leaves out
Taxes are the largest omission. For interest earned in a taxable account, US federal tax treats it as ordinary income, taxed at your marginal rate annually as earned. A reader in the 24% federal bracket holding $20,000 in a 4.5% HYSA pays roughly $200/year in federal tax on the interest, plus state tax depending on residency. Over 30 years the tax drag is meaningful — roughly 25% of the pre-tax terminal balance at typical marginal rates. The HYSA-vs-CD calculator and the retirement projections handle tax treatment explicitly; this tool does not, on the assumption that you are projecting a tax-advantaged or short-horizon account where tax drag does not dominate.
Inflation is the second omission. A $200,000 nominal balance 30 years from now is not worth $200,000 in today\'s purchasing power; at 2.5% average inflation, it is worth roughly $95,000. The calculator outputs nominal future dollars. If you want real (inflation-adjusted) projections, the simplest adjustment is to enter a real return rate — your expected nominal return minus expected inflation — in the APY field. For a 7% nominal return assumption with 2.5% inflation, enter 4.5% to get a real-dollar projection.
Contribution caps on tax-advantaged accounts are the third omission. The Roth IRA caps total annual contribution at $7,500 ($8,600 for those 50+) in 2026; a 401(k) caps employee deferral at $24,500 ($32,500 with catch-up). If you enter monthly contribution amounts that imply annual contributions above these caps, the projection is internally consistent but you would not be able to execute it in those accounts. Use this calculator for the underlying math and route into account-specific calculators (Roth IRA growth, 401(k) optimizer) when the cap structure matters.
The most useful application
Where this tool consistently pays its weight is in seeing the compounding inflection point — the moment when annual interest earned exceeds annual contributions. For most realistic input combinations this point lands around year 12 to 20, and seeing it on paper is what convinces people that consistent contributions to a productive account are worth doing even when they feel small in the present. Watching the interest column overtake the deposits column is the single most concrete way to internalize what compound returns actually do over a working career. That, more than any specific terminal-balance prediction, is what the tool is for.
Frequently asked
Why does monthly compounding give a different answer than annual?
Monthly compounding lets each month's interest start earning interest the next month, instead of waiting a full year. On modest balances and short horizons the difference is small; on a $20,000 balance held 30 years at 5%, monthly compounding gives roughly $3,000 more than annual compounding on the same nominal rate. Most US savings products (HYSAs, money market accounts, brokerage cash sweeps) compound daily or monthly; CDs sometimes compound less frequently. The calculator above uses monthly compounding because that approximates the typical retail experience closely without being notational overkill.
Why does the result use APY rather than an annual interest rate?
APY (Annual Percentage Yield) is the federally mandated comparison number on US deposit accounts under Regulation DD — it already bakes in the effect of the compounding frequency the bank actually uses. When you enter 4.5% in the field, the calculator treats that as the APY and converts to a per-period rate consistent with the stated compounding. If you have a nominal rate that does not match the APY (rare on retail deposit products in 2026), enter the APY for an honest comparison.
Is this calculator appropriate for investment accounts as well as savings?
It works for either — but the inputs change meaning. For a HYSA or CD, the APY is essentially known and stable for the term you are projecting. For an investment account, you are choosing an expected long-run return as the "APY" input, and that number is a guess about market behavior over decades. Reasonable equity return assumptions for retirement planning use figures in the 4–7% real range; nominal returns historically have been higher but include inflation. Run the model at multiple input rates (conservative, central, optimistic) rather than a single point estimate.
What does the calculator NOT account for?
Several material things. It does not model variable APY — if rates rise or fall during the projection, the actual outcome will differ from the constant-rate projection. It does not model taxes — in a taxable account, interest income is taxed in the year earned at your marginal rate, which materially erodes long-run accumulation. It does not model contribution caps — Roth IRA contributions, for example, are limited to $7,500 in 2026 even if your "monthly contribution" math implies more. It does not model inflation — future-dollar projections need to be discounted to make them comparable to today's purchasing power. For a fuller retirement projection that handles taxes and tax-advantaged caps, see the Roth IRA growth and 401(k) optimizer tools.