Compound Interest Calculator: Plan for a Strong Financial Future

Compound interest calculators will help you understand the future value of money you need to invest.

Whether you are looking to save for retirement, buy your dream house, or fund your aspirations? Our Compound Interest Calculator is here to help. With this powerful tool, you can easily calculate the growth of your investments over time and make informed financial decisions.


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How to use this Compound Interest Calculator?

  • Current Principal: It refers to the initial amount of money invested or deposited.

  • Annual Contribution: It represents the additional amount of money that will be contributed to the investment or deposit each year.

  • Term: It denotes the length of time for which the investment will be held or the deposit will be maintained.

  • Estimated Interest Rate: It signifies the anticipated rate of interest that will be earned on the investment or deposit.

  • Compound Interest Frequency: It indicates the frequency at which the interest will be compounded, such as annually, quarterly, monthly, or continuously.

  • Start Date: It denotes the date on which the investment or deposit begins.

    The results of the compound interest calculator show you how much money you may potentially earn by letting your money accumulate interest over time. The more time you have your money invested, the more interest you will earn, and the more money you will have in the end

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Table of Contents

  1. What is compound interest?
  2. How to calculate Compound Interest in a savings account?*
  3. How Does Compound Interest Grow Over Time? An Example:
  4. What are a few ways to earn compound interest on your investments in 2023?
  5. What are some tips for experiencing the power of compound interest in your investments?
  6. Conclusion

What is compound interest?

Compound interest is a powerful concept that plays a significant role in the world of investing and saving. It has the potential to turn even small amounts of money into substantial sums over time. Compound interest refers to the process of earning interest not only on the initial amount invested but also on the accumulated interest itself. In simple terms, it’s interest on top of interest, creating a compounding effect that accelerates the growth of your money.

When you use a compound interest calculator, you’ll get two key results:

  1. Future Value (Total Amount): The future value represents the total amount of money you will have at the end of a specified period, considering the initial amount, the interest rate, the term, and the frequency of compounding. It takes into account the compounding effect over time.*

  2. Interest Earned: The interest earned is the additional money you have gained through compound interest. It indicates how much your initial amount has earned in interestThis amount is the difference between the future value and the initial amount you invested.

How to calculate Compound Interest in a savings account?*

To calculate compound interest in a savings account, you can use the following compound interest formula:

  • Future Value = Principal * (1 + Interest Rate)^Number of Years


  • Principal Balance: The amount of money you deposit into your savings account.

  • Annual Rate: The annual interest rate offered by your savings account.

  • Number of Years: The number of years you plan to keep your money in your savings account.

For example, let’s say you deposit $1,000 into a savings account with a 5% annual interest rate. If you leave your money in the account for 5 years, it will grow to $1,276.28*.

  • Future Value = $1,000 * (1 + 0.05)^5 = $1,276.28

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How Does Compound Interest Grow Over Time? An Example:

Let’s say you invest $10,000 in a savings account that pays 5% interest compounded annually. This means that you earn interest on your original investment of $10,000, plus interest on the interest you’ve already earned.

After one year, you’ll earn $500 in interest. This brings your total balance to $10,500.

The following year, you’ll earn interest on your new balance of $10,500. This will be $525, which is more than you earned in the first year because you’re earning interest on interest.

This process continues over time, and your balance will grow at a faster and faster rate in dollar terms. After 10 years, your balance will be $16,288.

Here’s a compound interest table table showing how your balance would grow over time:


What are a few ways to earn compound interest on your investments in 2023?

  • Treasury bills (T-bills): T-bills are short-term debt obligations issued by the U.S. government. They offer a guaranteed interest rate, are backed by the full faith of the U.S. government, and have low minimum investment requirements. T-bills can be a good option for investors who are looking for a safe and low-risk investment.

  • High-yield savings accounts: These accounts offer higher interest rates than traditional savings accounts, which can help your money grow faster.

  • Certificates of deposit (CDs): CDs are another type of savings account that offer higher interest rates, but they come with a fixed term, so you’ll have to keep your money invested for the full term to earn the full interest rate.

  • Money market funds: Money market funds are a type of mutual fund that invest in short-term debt securities. They offer higher interest rates than traditional savings accounts, but they also have some risk.

  • Dividend-paying stocks: Dividend-paying stocks are a type of stock that pays out a portion of the company’s earnings to shareholders. Dividends can be reinvested to grow your investment even faster.

  • Exchange-traded funds (ETFs): ETFs are a type of investment that tracks a specific index, such as the S&P 500. ETFs offer diversification and low fees, which can help your money grow over time.

  • Real estate investment trusts (REITs): REITs are a type of investment that owns real estate. REITs can offer high returns, but they also carry more risk than other types of investments.

Disclosure: Investment services and the Brokerage Accounts for treasury securities are offered by Jiko Securities, Inc. (“JSI”) member FINRA and SIPC. For full disclosures and risks: see”

What are some tips for experiencing the power of compound interest in your investments?

  1. Start Early: The earlier you start investing, the more time your investments have to grow through the power of compounding. Even small contributions made consistently over a long period can accumulate significantly over time.

  2. Be Consistent: Regularly investing a fixed amount, such as through a systematic investment plan (SIP) or automatic contributions, allows you to take advantage of the compounding effect.

  3. Reinvest Dividends or Interest: If you receive dividends or interest payments from your investments, consider reinvesting them rather than taking them as cash. By reinvesting, you allow those earnings to compound over time.

  4. Stay Invested for the Long Term: Compounding works best when you have a long-term investment horizon. Avoid the temptation to make frequent changes or react to short-term market fluctuations. Stay focused on your long-term saving goals and give your investments time to compound.

  5. Diversify Your Portfolio: Diversification helps reduce risk by spreading your investments across different asset classes and sectors.

  6. Monitor and Review: Regularly monitor your investments. This allows you to make informed decisions timely and take necessary actions in your portfolio. Consider rebalancing your investments periodically to maintain your desired asset allocation.

  7. Consult with a Financial Advisor: Seeking advice from a qualified financial advisor can provide personalized guidance based on your specific investment goals, risk tolerance, and time horizon. They can help you optimize your investment strategy and make informed decisions regarding compounding and investment options.


Understanding compound interest is crucial for anyone seeking to make their money work harder for them. So start early, stay invested, and let compound interest help you create a potentially brighter financial future.


When is compound interest calculator for?

A compound interest calculator is a tool that can be utilized to forecast a potential future savings growth in savings accounts. Compounding (daily or monthly) involves adding the interest earned to the existing balance, and the following period’s interest is calculated based on the updated amount, rather than the original principal.

When is my interest compounded?

In a savings account with compound interest, the initial amount is increased by the interest at the end of each compounding period, which usually happens on a daily or monthly basis. The account balance grows as interest is added through calculations.

How do you calculate compound interest?

To calculate interest without a calculator, use the formula A=P(1+r/n)^nt, where:

A = ending amount
P = original balance
r = interest rate
n = number of times interest is compounded in a specific timeframe
t = time frame

The above content provided and paid for by Public and is for general informational purposes only. It is not intended to constitute investment advice or any other kind of professional advice and should not be relied upon as such. Before taking action based on any such information, we encourage you to consult with the appropriate professionals. We do not endorse any third parties referenced within the article. Market and economic views are subject to change without notice and may be untimely when presented here. Do not infer or assume that any securities, sectors or markets described in this article were or will be profitable. Past performance is no guarantee of future results. There is a possibility of loss. Historical or hypothetical performance results are presented for illustrative purposes only