Watch your savings investment grow with this simple compound interest calculator from Savvy.
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Watching your savings grow is exciting and can motivate you to save even more money to make your financial dreams become a reality. Use Savvy’s compound interest calculator to see exactly how much you’ll earn from your savings account on a daily, monthly or annual basis.
Are you looking to grow your savings? Compare a wide range of savings accounts with Savvy so you find the best deal in Australia and the highest interest rate to help grow your savings.
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Disclaimer: Savvy is not advising or recommending any particular product to you. We provide general information on products for the purposes of comparison, but your personal situation or goals are not considered here. Although we try to make our comparisons as thorough as possible, we do not have information on all products on the market on our site.
You should always consult a given offer's PDS or further documentation in the process of deciding on which loan to choose, as well as seeking independent, professional advice. If you decide to apply with one of the lenders listed above via our website, you will not be dealing with Savvy; any applications or enquiries will be conducted directly with the lender offering that product.
It’s very simple to use this compound growth calculator. Just enter in your deposit amount, the interest rate offered by your savings account and the savings term and click anywhere on the chart to view your results.
The daily compound interest calculator will show you how much interest your savings will earn on a daily, monthly and annual basis, with the effective yield rate also calculated. Using the compound growth calculator regularly will help you keep track of your savings growth and will keep your motivation up as you watch your nest egg growing each month.
Compound interest means the interest you earn is added onto the original principal sum that you deposit, which essentially means you end up earning interest on your interest. The effect of compounding means your savings will grow more rapidly.
For example, if you deposit $5,000 with an interest rate of 1% p.a., you’ll have earned $50 in interest (rounded to the nearest dollar) at the end of 12 months. This is added onto your original sum, so in Year 2 you will earn interest on $5,050, which means you’ll end up with $5,101. After 3 years this will have grown to $5,152, and so on.
The more frequently your interest is compounded, or added on to your principal, the quicker your savings will grow. Most financial institutions calculate interest daily and add the interest back into your account monthly, so you can watch your savings grow month by month.
Simple interest is calculated on an annual basis as a percentage of the principal amount, which is why home loan interest rates are quoted ‘per annum,’ for example 2.5% p.a. This method of interest calculation is used most frequently for home loans, car loans and personal loans. The simple interest formula is very easy to work out:
Simple Interest = Principal amount × Rate of interest × Time period
Compound interest, on the other hand, is used for savings accounts, credit card debt, money market accounts and Certificates of Deposit. In all these cases, the interest earned or owed increases over time.
The three main factors that affect how quickly your savings will grow are the interest rate, the compounding frequency and the time frame that is applied.
The compound interest formula to use to determine the amount of interest you’ll earn over a given period is:
Final balance = principal x (1 + (interest rate ÷ compound frequency)) time period
In more simple terms:
An example of this calculation is based on $5,000 deposited for one year with an interest rate of 1% which compounds monthly:
$5,000 x (1 + (0.01 ÷ 12)) 12 = $5,050.23
In this example, the final balance after one year would be $5,050.23, which means you will have earned $50.23 in interest in the first 12 months. Of course, using Savvy’s daily compound interest calculator will do all the hard maths for you and give you an instant result, saving you on time and hassle.
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Your savings will grow faster if you make more frequent deposits. Making a smaller savings deposit every fortnight is far better than making one large deposit once a month. This is because interest is calculated daily, so the more frequent your deposits, the more interest will be earned and the faster your nest egg will grow.
Comparing different financial products is important to make sure you’re getting the best deal possible. Banks and financial institutions are continually bringing out new products, so it’s a good idea to check with Savvy regularly to make sure you have the highest interest rate on offer for your savings.
Leaving your savings in place to gain interest is vitally important if you want your savings to grow, so resist the temptation to withdraw money from your savings account as much as possible.
Your savings will grow more effectively if you don’t rely on memory to make deposits – but instead set up an automatic transfer from your transaction account to your savings account every time you get paid. In this way, your savings will increase in the background without you having to remember to make regular contributions.
Use our savings calculator to help you calculate how much you could save over a set timeframe based on different deposit sizes and frequencies.
Your savings can put in work for you. Crunch the numbers to see how much interest you could earn on top of your interest by compounding daily, monthly and annually.
It's crucial to have a clear idea of your monthly household budget to see where your money is going and where it could potentially be better spent.
If you're applying for a loan or need to know what your salary is for your tax return, you can use our annualisation calculator to work out what you'll earn this financial year.
Setting savings goals is important. With this tool, you can work out how much you'll need to deposit to reach your financial aims over a set timeframe.
Just as important as knowing how much to deposit is working out how long it'll take to reach your goals. This savings goal calculator can help you do just that.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
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For more information about us and how we conduct our business, you can read our privacy policy and terms of use.
© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
We’re partnered with lenders, insurers and other financial institutions who compensate us for business initiated through our website. We earn a commission each time a customer chooses or buys a product advertised on our site, which you can find out more about here, as well as in our credit guide for asset finance. It’s also crucial to read the terms and conditions, Product Disclosure Statement (PDS) or credit guide of our partners before signing up for your chosen product. However, the compensation we receive doesn’t impact the content written and published on our website, as our writing team exercises full editorial independence.
For more information about us and how we conduct our business, you can read our privacy policy and terms of use.
