📈 Compound Interest Calculator
See how your savings grow over time — with or without regular deposits. Includes typical Australian bank rates.
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💡 Typical AU rates: ING 5.50% · Macquarie 5.35% · Big 4 ~3–4.5% · HISA ~4.5–5.5%
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Regular deposits (optional)
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Compound interest — the most powerful force in personal finance
Compound interest means earning interest on your interest. It sounds simple, but the long-term effect is extraordinary. A single dollar invested at 7% per year becomes $7.61 after 30 years — without adding another cent.
The key variables are rate, time, and compounding frequency. Time is the most powerful. Starting to invest at 25 versus 35 can double your final balance by retirement, even with the same contributions. The maths is unforgiving in reverse too — high-interest debt compounds just as relentlessly against you.
- Rule of 72: Divide 72 by your interest rate to estimate the doubling time. At 8% returns, money doubles every 9 years. At 4%, every 18 years.
- Compounding frequency: Daily or monthly compounding produces slightly more than annual compounding at the same stated rate. The difference grows larger over time.
- Regular contributions: Adding money regularly (dollar-cost averaging) amplifies the compounding effect dramatically — early contributions have the longest time to grow.
- Australian context: Super funds compound returns over decades. A 0.5% difference in annual fees can cost over $100,000 in final balance over a working lifetime.
🦘 Fun fact: The quote "compound interest is the eighth wonder of the world" is widely attributed to Einstein, but there's no evidence he ever said it. The earliest known version appeared in a 1983 US newspaper. Einstein's actual views on banking are unrecorded. The maths, however, checks out regardless of who said it.