Compound Interest Rate Calculator

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Simple Compound Interest Calculator

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Interest Earned: $0.00

Total Balance: $0.00

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Customers Also Viewed These High Yield Savings Accounts

American Express High Yield Savings Account Logo

Annual Percentage Yield (APY)

3.70% APY

APY as of April 18, 2025

5.0

CompareAccounts™ Score

Open Account

 On American Express National Bank's
Secure Site, Member FDIC

American Express® High Yield Savings Account

Best For: Competitive APY From An Online Bank

American Express is best known for their suite of incredibly rewarding credit cards. They also offer a high yield savings account with a competitive Annual Percentage Yield (APY) of 3.70% as of April 18, 2025.

Your interest compounds daily and is deposited in your account monthly.

Other benefits of this account include $0 monthly fees, 24/7 Customer Service, FDIC insurance up to $250,000 per depositor and the fact it's backed by the service & reliability of American Express, it's a no brainer as to why so many people are signing up.

To top it off, you can easily check balance and transaction history, deposit funds, and more within the American Express® App.

See American Express National Bank's Secure Site For More Details.

  High APY 

Western Alliance Bank Powered by Raisin

4.25% APY

5.0

CompareAccounts™ Score

Open Account

On Raisin's Secure Site for
Western Alliance Bank, Member FDIC

Western Alliance Bank® High Yield Savings Account

Best For: High APY Interest Rates

Western Alliance Bank offers 4.25% APY exclusively through the Raisin Platform.

This APY is substantially higher than what you’ll find at most brick-and-mortar banks and even most online banks.

In addition to this high APY, Western Alliance offers $0 monthly maintenance fees, unlimited withdrawals, and is insured by the FDIC for up to $250,000 per depositor.

Customer service is located in New York, NY and is available via email and phone. You'll have online access to your funds 24/7.

Western Alliance Bank is consistenly ranked among the top banks. The bank has over $80 Billion in Assets and were ranked #1 top-performing large bank with assets greater than $50 billion in 2021, 2022, 2023 & 2024 by American Banker. Serving clients across the country wherever business happens.

Limited Time Offer: New customers can earn a $75 bonus for $10K, $250 bonus for $25K, or $500 bonus for $50K deposited or more. Use promo code BOOST at sign-up.

See Raisin's Secure Site for Western Alliance Bank For More Details.

 

🧮 How to Use the Compound Interest Calculator

  1. Enter Your Initial Deposit
    💵 This is the amount of money you’re starting with — e.g., $10,000.

  2. Input the Annual Interest Rate (%)
    📈 Enter the interest rate your account earns each year.
    (For example, type 5 for 5% APY)

  3. Set the Term Length (in Years)
    📆 How long you plan to keep the money invested or saved.
    (e.g., enter 10 for 10 years)

  4. Choose How Often Interest Compounds
    🔄 Select how frequently your interest is added to your balance:

    • Daily (365)

    • Monthly (12)

    • Quarterly (4)

    • Annually (1)

  5. (Optional) Add a Monthly Contribution
    ➕ Want to grow your balance faster? Enter how much you’ll add each month.

  6. Click “📈 Calculate”
    ✅ The calculator will instantly show:

    • Interest Earned: How much interest you’ll accumulate

    • Total Balance: Your future balance including interest + contributions

  7. Compare Offers
    🔍 Use the links provided to compare compound interest accounts.

​

🧠 Key Factors That Influence Compound Interest

  1. Initial Principal (Starting Amount)
    💰 The more you invest up front, the more your money compounds over time.

  2. Interest Rate (Annual Percentage Yield – APY)
    📈 A higher rate results in more interest earned. Even a small increase can make a big difference over time.

  3. Time (Investment Duration)
    ⏳ Compound interest is exponential — the longer you leave your money invested, the more dramatic the growth.

  4. Compounding Frequency
    🔁 Interest can be compounded:

    • Daily

    • Monthly

    • Quarterly

    • Annually
      More frequent compounding means your money earns interest on interest sooner and more often.

  5. Regular Contributions
    ➕ Making monthly deposits or recurring contributions accelerates growth by adding new principal to compound on.

  6. Tax Treatment (if applicable)
    🧾 In taxable accounts, interest may be reduced by taxes. In tax-advantaged accounts like IRAs or 401(k)s, growth is tax-deferred or tax-free, which enhances compounding power.

  7. Withdrawals or Interruptions
    📉 Taking money out early (before interest fully compounds) can reduce long-term gains significantly.

📊 Example:

  • $10,000 at 5% APY compounded monthly over 10 years = $16,470

  • Add $100 monthly = $28,923

💬 Frequently Asked Questions (FAQ)

What is compound interest, and why does it matter?

Compound interest means you earn interest on both your original money and the interest you’ve already earned. Over time, this snowball effect helps your money grow faster compared to simple interest.

How is compound interest different from simple interest?

Simple interest only pays on your original deposit. Compound interest pays on your deposit plus the accumulated interest, which accelerates your growth over time.

What kinds of accounts use compound interest?

  • High-yield savings accounts

  • Certificates of Deposit (CDs)

  • Money market accounts

  • Investment accounts (reinvesting dividends)
    Most savings products compound daily or monthly.

What does “compounding frequency” mean?

It’s how often your interest is calculated and added to your balance. More frequent compounding (like daily) = faster growth.

Can I lose money with compound interest?

Not in traditional savings or CD accounts, which are FDIC-insured. But with investments, while compounding helps growth, market losses are still possible.

📘 Glossary of Terms

Principal
💰 The original amount you deposit or invest.

Interest Rate
📈 The percentage your money earns annually, before compounding.

Compound Interest
🔁 Interest that’s calculated on both your original money and previous interest earned.

APY (Annual Percentage Yield)
📊 The total return on your money in a year, including compounding. This is what banks typically advertise.

Compounding Frequency
⏱️ How often interest is applied to your balance:

  • Daily = 365 times/year

  • Monthly = 12 times/year

  • Quarterly = 4 times/year

  • Annually = once per year

Term
📆 The length of time you plan to let your money grow.

📊 Compound Growth Examples

Give users clear comparisons to drive the benefits home:

💡 Without Monthly Contributions

  • $10,000 @ 5% for 10 years, compounded monthly = $16,470

  • $10,000 @ 5% for 30 years, compounded monthly = $44,677

💡 With $100/Month Contributions

  • $10,000 + $100/month @ 5% for 10 years = $28,923

  • $10,000 + $100/month @ 5% for 30 years = $100,451

📈 As you can see, regular contributions + time = exponential growth.

🏦 Account Types That Offer Compound Interest

Account Type Compounds Typical Rate Ideal For
High-Yield Savings Daily/Monthly Fixed based on Fed Rate Emergency funds, short-term savings
Certificates of Deposit Daily Fixed based on Fed Rate Locked savings for 6–60 months, usually higher APY
Money Market Accounts Monthly Fixed based on Fed Rate Larger balances, flexible access
Roth IRA / Traditional IRA Market-based Varies Long-term retirement savings
Brokerage Accounts Reinvestment Varies Long-term investing, dividend growth

💡 Not all accounts compound the same way — always read the fine print.

🧠 Compound Interest Saving & Investing Tips

Start Early
The earlier you start, the more your money compounds — even if you start small.

Make Regular Contributions
Set up automatic monthly deposits to consistently grow your balance.

Avoid Interruptions
Withdrawals reset your compounding momentum. Let the money ride.

Compare APYs
Even a 1% difference in APY can mean thousands of dollars over time.

Use Tax-Advantaged Accounts
Roth IRAs, 401(k)s, and HSAs allow compounding to happen tax-free or tax-deferred.

Choose the Right Product

  • Short-term = high-yield savings or CDs

  • Long-term = IRAs, index funds, or dividend reinvestment accounts

🧸 What Is Compound Interest? (As explained to a 5 year old)

Imagine you have a piggy bank.

🪙 On the first day, you put $1 inside.

The next day, your piggy bank gives you a few extra pennies just for keeping your money in there. That’s called interest — it’s like a little thank-you gift for saving.

But here’s the magic part:
🔁 Tomorrow, your piggy bank gives you even more pennies — not just for your $1, but also for the pennies you got yesterday!

So now, your money is helping make more money, all by itself.
And the longer you leave it in the piggy bank, the faster it grows — like a snowball rolling down a hill! ❄️💰

*National Savings Rate Average as published by FDIC