See how your savings grow with compound interest and regular deposits. Compare rates to see the power of higher APY.
HYSAs: ~4–5% APY. S&P 500 avg: ~10%. Traditional banks: <0.5%.
| APY | Balance | Interest Earned |
|---|---|---|
| 0.5% | $66,768 | $1,768 |
| 2.0% | $72,466 | $7,466 |
| 4.5% ◀ | $83,434 | $18,434 |
| 5.0% | $85,876 | $20,876 |
| 7.0% | $96,591 | $31,591 |
The Compound Interest Calculator projects how a savings balance grows over time when interest is earned not just on your initial deposit, but on all the interest that's accumulated along the way. Enter a starting balance, a monthly contribution, an annual interest rate (APY), and a time horizon to see your total balance, total contributions, and total interest earned.
Because interest compounds monthly in this calculator, even small differences in rate or in how early you start make a large difference over long periods. It's the same math that applies to high-yield savings accounts, CDs, and retirement accounts — use it to compare 'what if I started 5 years earlier' or 'what if I found a 1% higher rate' scenarios side by side.
A = P(1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) − 1) / (r/n)]The first term grows your initial deposit (P) at the compounding rate. The second term adds the future value of your regular monthly contributions (PMT), each of which compounds for the remaining time after it's deposited. With monthly compounding, n = 12.
Example 1: Starting from scratch with monthly deposits
$0 initial deposit, $500/month contribution, 4.5% APY, 10 years.
Balance grows to about $74,500 — roughly $60,000 in contributions plus about $14,500 in interest earned.
Example 2: A $5,000 head start
$5,000 initial deposit, $500/month, 4.5% APY, 10 years (this calculator's defaults).
Balance grows to about $82,300 — about $7,800 more than starting from zero, just from that one-time $5,000 deposit compounding for 10 years.
Example 3: The cost of a lower rate
Same $5,000 + $500/month, but in a traditional savings account earning 0.5% instead of 4.5%, over 10 years.
Balance reaches only about $66,500 — over $15,800 less than the high-yield account, even though contributions are identical.
Methodology
FV = PV·(1+r/12)^(12·t) + PMT·[(1+r/12)^(12·t) − 1]/(r/12). Monthly compounding. r = annual rate.
Compound interest means you earn returns on both your principal and previously accumulated interest. A $10,000 deposit at 5% earns $500 in year 1. In year 2, you earn 5% on $10,500 — $525. This snowball effect accelerates dramatically over decades, which is why starting early is so powerful.
High-yield savings accounts (HYSA) from online banks offer 4–5% APY as of 2025. CDs (certificates of deposit) can offer similar or slightly higher rates for locked-up terms. Traditional bank accounts average under 0.5% — a significant opportunity cost for money sitting idle.
Disclaimer: Calculations are for informational purposes only and do not constitute professional financial advice. Please consult with a certified professional before making financial decisions.