Compound Interest Planner

Initial Deposit ($)

Monthly Contribution ($)

Annual Interest (%)

Years to Grow

Total Contribution

$13,000

Interest Earned

+$4,175

Final Balance

$17,175

The "Snowball Effect" of Compounding

As seen in the chart above, the gap between your **Total Contributions** and **Total Savings** grows wider every year. This is the "Snowball Effect"—where your interest begins to earn interest of its own.

Why Start Early?

Waiting just 5 years to start saving can result in losing tens of thousands of dollars in potential growth due to lost compounding time.

The Power of Consistency

Adding just $50 more per month doesn't feel like much now, but over 20 years, that $50 can turn into an extra $20,000+ depending on your rate.

How This Savings Calculator Works

This savings calculator uses the compound interest formula to estimate how your money grows over time. You enter an initial deposit, a fixed monthly contribution, an annual interest rate, and the number of years. The tool then simulates month-by-month growth and displays your projected balance.

What Is Compound Interest?

Compound interest means you earn interest not only on your original money, but also on the interest that accumulates over time. This creates exponential growth instead of linear growth.

For example, saving $200 per month at 6% annually for 20 years results in over $90,000 — even though your total contributions are only $48,000.

Real Example Scenario

Initial deposit: $1,000
Monthly contribution: $150
Interest rate: 7%
Time period: 25 years

Total invested: $46,000 Final balance: ~$120,000 Interest earned: ~$74,000

Best Strategies to Grow Your Savings

Increase your contributions gradually
Automate deposits
Invest in diversified funds
Reinvest all interest
Start as early as possible

Common Savings Mistakes

Keeping money in low-interest accounts
Stopping contributions during market downturns
Trying to time the market
Ignoring inflation

Savings vs Investing

Savings accounts are low-risk but offer low returns. Investments (like index funds) provide higher long-term growth but come with short-term volatility. For long-term goals (retirement, wealth building), investing usually outperforms saving.

Frequently Asked Questions

Is this calculator accurate?
It provides realistic estimates based on compound interest formulas.

Should I include inflation?
For real-world planning, subtract 2–3% annually from returns.

How often should I review my plan?
Every 6–12 months.

What is a good interest rate?
5–8% is realistic for long-term diversified portfolios.