Free Financial Compass

Savings and the Power of Compound Interest

Compound interest has been called the eighth wonder of the world. It's the process where the interest you earn on your savings or investments also starts earning interest. Over time, this creates a snowball effect that can dramatically accelerate your wealth-building.

This calculator is designed to help you visualize that power. Whether you're saving for retirement, a down payment on a house, or any other long-term goal, understanding how your money can grow is the first step toward making it a reality.

Savings Calculator

Project your savings growth with monthly contributions, interest compounding, and visualizations. See how your money grows over time.

How to Use the Savings Calculator

• Initial Deposit: Enter the amount of money you are starting with. If you're starting from zero, that's perfectly fine!
• Monthly Contribution: This is the key to long-term success. Enter the amount you plan to add to your savings or investment each month consistently.
• Annual Interest Rate: Enter the expected annual rate of return. For a high-yield savings account, this might be 4-5%. For a diversified investment portfolio, a historical average might be 7-10%.
• Term (Years): How long do you plan to let your money grow? The longer the term, the more significant the impact of compounding will be.

Interpreting Your Results

Your results will show a powerful projection of your financial future:

• Future Value: This is the grand total your savings will grow to at the end of the term.
• Total Contributions: This shows the total amount of money you personally put in over the entire period.
• Total Interest Earned: This is the most exciting number—it's the money your money made for you through compounding.
• Growth Chart: The bar chart visualizes your journey year by year. Watch how the 'Interest' portion of the bars grows larger over time, often overtaking your principal contributions in later years. This is compound interest in action.