How much interest will I earn : Compound Interest Calculator
Your money makes money when deposited in an interest-bearing account. This is due to compounding, where your principal earns interest and then, over time, it earns interest on both the principal and the interest that has been deposited to your account. How much money you can earn due to compounding depends on how long you leave your funds untouched on deposit, how often interest is compounded, and the interest rate being offered on your account.
To make the most of your money, search for the best savings account rates and be selective about how frequently interest is compounded. Interest may be compounded on a daily, monthly or annual basis. If you’re unsure about how often your account or bank compounds interest, ask a bank customer service representative or check your account disclosure documents.
Finding the best savings account rates
The national average interest rate for non-jumbo savings accounts (balances less than $100,000) is 0.09% * according to the Federal Deposit Insurance Corporation (updated February 2019). However, MoneyRates.com lists many of the best savings account rates, some of which are as high as 2.45%. The compound interest calculator below can help you visualize the difference and explore alternatives for your savings.
Whether you’re happy with your current bank or want to make a switch, using the compound interest calculator frequently can help you identify the best savings account rates among those you’ve seen advertised so you can make an informed decision about what helps your financial situation the most.
How to use the compound interest calculator+
There are four input boxes in the compound interest calculator. Simply enter your information and hit Tab to jump to the next field. Here’s what to enter:
- Your opening deposit:
Enter the amount you have available to save at the beginning. Don’t bother with dollar signs or commas – the calculator will take care of those automatically.
- How many years?
Enter the number of years you will keep these funds on deposit in your savings account.
- How often is interest compounded?
Select a compounding frequency from the dropdown menu: Daily, Monthly, Semi-Annually, or Annually.
- Enter an interest rate - or click to select one of our featured banks below to compare rates:
By default, this input box is left blank so you can enter an interest rate -- the interest rate offered by your current bank, for example.
However, when you enter an opening deposit amount above, the calculator immediately checks our featured banks for their best savings account rate – so you may see that this section offers other alternatives.
If you want the calculator to show and use a featured bank’s rate in its calculation, click on one of the bank logos immediately below. This will automatically enter that bank’s current rate into this field so you can compare it against other interest rates.
When you click on the Calculate button, your results display immediately below. The amount is how much money you will have at the end of the period you selected.
You can experiment with the calculator to see how different parameters for interest rates, length of time, and compounding may help your finances.