Compound Interest Calculator
See how your savings or investments grow with compound interest and regular contributions over time.
| Total Contributions | — |
| Total Interest Earned | — |
| Interest as % of Final | — |
| Doubling Time (Rule of 72) | — |
How It's Calculated
Compound interest is interest that earns interest. Each period the balance grows by the periodic rate, and the next period's interest is worked out on that larger balance. Add regular contributions and the balance grows from two directions at once — the money you put in, and the return on everything already sitting there.
The formula
FV = PV × (1 + r/n)^(n×t) + PMT × ((1 + r/n)^(n×t) − 1) / (r/n)
Where: FV = future value, PV = present value (principal), r = annual rate, n = compounding periods per year, t = time in years, PMT = regular contribution.
What this calculator assumes
Two assumptions worth knowing before reading the result. Contributions are treated as landing at the end of each period, which is how most people actually save — the pay arrives, then the transfer goes out. And the frequency toggle sets both how often you contribute and how often interest compounds: choose Monthly and you get twelve contributions and twelve compounding periods a year. To isolate the effect of compounding frequency on its own, set the regular contribution to $0 and switch the toggle.
A worked example
Take $10,000 to start and $500 a month at 4.80% — the average rate on banks' bonus savings accounts at a $10,000 balance in July 2026 (RBA Table F4) — over 10 years, compounding monthly. The calculator returns:
| Output | Result |
|---|---|
| Final balance | $92,961 |
| Total contributions | $70,000 |
| Total interest earned | $22,961 |
| Interest as % of final | 24.7% |
| Doubling time (Rule of 72) | 15.0 years |
Ten years is not long enough for compounding to take over — three-quarters of that balance is still money you deposited. Run the same $10,000 and $500 a month for 20 years at 7% and the balance reaches $300,851, of which $170,851, or 56.8%, is interest. The crossover, where compounding is putting in more than you are, is what the long horizons are for.
Does Compounding Frequency Actually Matter?
Less than the marketing suggests. Daily compounding sounds meaningfully better than annual, and it is better — just not by much. Here is $10,000 with no contributions at 4.80%, left alone, with nothing changed but the compounding frequency:
| Compounding | After 10 years | After 25 years | Effective annual rate |
|---|---|---|---|
| Annually | $15,981 | $32,287 | 4.800% |
| Quarterly | $16,115 | $32,965 | 4.887% |
| Monthly | $16,145 | $33,122 | 4.907% |
| Daily | $16,160 | $33,199 | 4.917% |
Over a decade, moving from annual to daily compounding on $10,000 is worth $179. Over 25 years it is $912. Real money — but a tenth of a percentage point on the headline rate swamps it, which is why the advertised rate deserves more attention than the compounding schedule. The toggle on this page offers annual, quarterly and monthly; the daily row is the same formula run at n = 365.
Nominal rate vs effective annual rate
The rate advertised on a savings account is the nominal annual rate: 4.80% a year, paid in monthly slices of 0.40%. The effective annual rate is what you actually finish the year with once those slices have compounded — 4.907% in the monthly case. The two are equal only when interest is paid once a year. Australian banks generally quote the nominal rate and credit interest monthly, so the effective rate is a little higher than the number in the ad. It also means two accounts quoting an identical nominal rate can pay different amounts if one credits monthly and the other quarterly.
Contributions Do More Work Than the Rate
Over the horizons most people are planning for — five to fifteen years, not fifty — how much goes in matters more than what rate it earns. The spread between Australia's better and worse savings rates is real: banks' bonus savings accounts averaged 4.80% at a $10,000 balance in July 2026, while ordinary online savings accounts averaged 3.10% (RBA Table F4). That is a 1.7 percentage point gap. Here is what closes it, each starting from $10,000 over 10 years:
| Scenario | Rate | Monthly contribution | Balance after 10 years |
|---|---|---|---|
| Online savings account | 3.10% | $500 | $83,864 |
| Bonus savings account | 4.80% | $500 | $92,961 |
| Online savings, $100 more a month | 3.10% | $600 | $97,911 |
Chasing 1.7 percentage points added $9,097 over the decade. Adding $100 a month at the worse rate added $14,047. The two stack, so neither is wasted — but the contribution lever is the bigger one, and it is the one you control, since rates are set by someone else. The savings goal calculator runs this in reverse: name a target and a date, and it returns the contribution required to get there.
Time in the market, not timing it
$10,000 left alone at 7% with annual compounding grows to $76,123 over 30 years. Add $500 a month, compounding monthly, and the same 30 years finish at $691,150 — of which $501,150, or 72.5%, is interest. Start the same $500 a month ten years later and 20 years produces $300,851. That extra decade at the front is worth $390,299, and only $60,000 of it is extra deposits.
What Inflation and Tax Do to the Number
The final balance is a nominal figure — dollars, not buying power. Australia's headline CPI rose 3.8% in the year to June 2026 (ABS — Consumer Price Index, Australia), against that 4.80% savings rate. The real return is roughly one percentage point a year: the balance is growing, but slowly, in the only terms that matter. The inflation calculator converts a projected balance back into today's dollars.
Interest is taxed at your marginal rate
Interest from a bank is part of your assessable income for the income year, so it is taxed at whatever marginal rate your total income lands you in. There is no separate savings-interest rate, and no discount for leaving the money there longer (ATO — Investing in bank accounts and income bonds). For FY 2026–27, taxable income between $45,001 and $135,000 is taxed at 30c in the dollar, plus the 2% Medicare levy (ATO — Tax rates for Australian residents).
That changes the arithmetic. $50,000 in a savings account at 4.80% earns $2,400 of interest in a year. On an $80,000 salary, 32c of every one of those dollars goes to tax — $768 — leaving $1,632, an after-tax return of 3.26%. Against CPI at 3.8%, the same $50,000 lost about $268 of buying power across the year. Worth modelling before assuming a high-interest account is keeping you ahead of prices; the same question over longer horizons is what the investment calculators are for. The income tax calculator will confirm which bracket the interest lands in.
The TFN rule
If your bank does not hold your tax file number, it withholds tax from your interest at the top rate of tax plus the Medicare levy — 45% plus 2%, so 47% — no matter what you actually earn (ATO — Withholding from investment income). It is not money lost: the withheld amount is claimed as a credit when you lodge, and the difference comes back. Withholding is not required where an account pays less than $120 of interest for the financial year, and a TFN is not needed at all for an account in the name of someone under 16 earning less than $420 of interest a year.