Bank Interest Calculator
Savings & BankingHow much interest your savings really earn.
Balance, rate & time
Advanced options
- Starting balance$10,000
- Deposits$24,000
- Interest$10,358
Estimates only, built from the figures you enter — not financial, tax, legal or other professional advice. Real accounts differ: rates move, interest can post on schedules the model simplifies, and how interest is taxed depends on where you live.
Compound vs simple growth
The gap between the two lines is everything compounding adds.
Simple vs compound interest
The same money and rate, paid two ways.
- Simple$8,760
- Compound$10,358
Compounding earns $1,598 more than flat simple interest here.
Interest by compounding frequency
How much a 4.00% nominal rate earns at each frequency over 10 yrs.
- Annually$10,142
- Semi-annually$10,258
- Quarterly$10,318
- Monthly$10,358
- Weekly$10,374
- Daily$10,378
Nominal vs real value
What the after-tax balance is worth after 2% inflation.
- After-tax balance$42,805
- In today's money$35,115
Savings growth table
| Year | Deposits | Interest | Balance (compound) | Balance (simple) |
|---|---|---|---|---|
| 0 | $0 | $0 | $10,000 | $10,000 |
| 1 | $2,400 | $452 | $12,852 | $12,844 |
| 2 | $2,400 | $568 | $15,820 | $15,784 |
| 3 | $2,400 | $689 | $18,909 | $18,820 |
| 4 | $2,400 | $815 | $22,124 | $21,952 |
| 5 | $2,400 | $946 | $25,470 | $25,180 |
| 6 | $2,400 | $1,082 | $28,952 | $28,504 |
| 7 | $2,400 | $1,224 | $32,576 | $31,924 |
| 8 | $2,400 | $1,372 | $36,348 | $35,440 |
| 9 | $2,400 | $1,525 | $40,273 | $39,052 |
| 10 | $2,400 | $1,685 | $44,358 | $42,760 |
How compound interest is worked out
- A 4.00% nominal rate compounded 12× a year comes to an effective annual rate of 4.074%.
- That works out to a monthly rate of 0.3333%, applied across 120 months.
- Compounding credits interest that then earns interest, reaching $44,358 — $10,358 of interest on $34,000 paid in.
- Flat simple interest on the same money would earn $8,760, so compounding adds $1,598.
- A 15% tax leaves $8,805 of interest, and 2% inflation values the balance at $35,115 in today's money.
Know what this estimate is based on
- Jurisdiction
- General mathematical model
- Scope and limitations
- Projection only. Actual APY, posting dates, compounding, taxes, withdrawal rules, deposit protection, and fees depend on the financial institution and country.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter the balance already sitting in the account, then choose whether you also pay money in and how often — monthly, quarterly, yearly, or not at all.
- 02
Type the annual rate. Leave it as APR and pick a compounding frequency from yearly through daily, or switch to APY to enter the effective yield a bank advertises.
- 03
Set the time period and its unit, then give a tax rate for the interest and an inflation figure, which let the result appear after tax and in present-day terms.
- 04
Read the interest earned at the top, and flip between Compound and Simple to see how much of that interest is the compounding bonus rather than flat interest on your deposits.
- 05
Scan the compound-versus-simple chart, the frequency comparison and the year-by-year table to see where the interest comes from and how the compounding frequency changes it.
Formula
The calculator works interest out two ways over the same monthly timeline. The compound path collapses your compounding frequency into one monthly-equivalent rate: it finds the effective annual rate first — for an APR of r compounded n times a year that is EAR = (1 + r/n)^n − 1, while an APY you enter is already the effective rate — and then takes its twelfth root, i_m = (1 + EAR)^(1/12) − 1, so annual through daily compounding is handled exactly. Each month the balance earns i_m, that interest is added, and the larger balance earns interest next month; deposits join on the schedule you choose. Compound interest is the ending balance minus everything you paid in. The simple path uses the plain nominal rate and never adds interest back to the base: your starting balance earns r for the whole term, and each deposit earns r only for the months it is actually in the account, so simple interest is the classic principal × rate × time, summed across every deposit. The gap between the two, compound interest minus simple interest, is the compounding bonus — and it can be negative over a short term at a low compounding frequency, because a smooth compound curve trails linear simple interest inside a single period. Tax is applied to the interest at the end as interest × (1 − tax rate), and inflation restates the after-tax balance in today's money by dividing it by (1 + inflation)^years.
Example
Suppose $10,000 is already banked and you add $200 at the close of every month, earning a 4% APR compounded monthly — an effective yield near 4.07% — held for 10 years, taxed at 15% on interest with 2% inflation. Since the rate compounds twelve times a year, the monthly rate is exactly 4% ÷ 12, or 0.3333%. Your own contributions come to $34,000: the opening $10,000 plus 120 monthly payments of $200. Compounding lifts the balance to $44,358.29, of which $10,358.29 is compound interest. Were the same deposits paid flat simple interest at that 4%, they would earn just $8,760.00, for a $42,760.00 balance — making the compounding bonus, the reward for leaving interest to earn interest, $1,598.29. Tax of 15% leaves $8,804.54 of interest kept, and 2% inflation across the decade values the balance at about $35,114.64 in present-day money. Year one alone adds $451.91 of compound interest, and the money finishes at 1.30 times what was paid in. Read each number as a projection that stands only while the rate, compounding, tax and inflation match what you entered for all 10 years.
Definitions
- Interest earned
- The headline this tool reports: the money your balance and deposits generate on top of what you paid in, shown for whichever path — compound or simple — you have selected. In the default example the compound figure is $10,358.29 of interest on $34,000 paid in, and it is the number to watch, not the ending balance that includes your own money.
- Compound interest
- Interest that is credited and then earns interest itself, so growth speeds up the longer money stays put. On the default plan it reaches $10,358.29 — more than flat simple interest, because each month's interest joins the balance and starts earning in the months that follow.
- Simple interest
- Interest credited only on the money you contribute, never on interest already earned — the classic principal × rate × time. The starting balance earns for the whole term and each deposit earns for the time it sits in the account, coming to $8,760.00 in the example against the same 4% rate.
- Compounding bonus
- Compound interest minus simple interest — the entire value of letting interest earn interest, isolated as one number. It is $1,598.29 in the example, but it is shown signed on purpose: over a short term at a low compounding frequency it can turn negative, because a smooth compound curve can trail flat simple interest inside a single period.
- Compounding frequency
- How often interest is added to the balance — yearly, semi-annually, quarterly, monthly, weekly or daily. More frequent compounding lifts the effective yield for the same nominal rate, so the tool compares the interest each frequency earns. It changes the compound path only; simple interest never compounds, so it is unaffected.
- APR
- The nominal annual rate the account quotes, before compounding is counted. Entered together with a compounding frequency, it drives both paths — the compound path turns it into an effective rate, while the simple path uses it as-is at 4% in the example.
- APY (effective annual yield)
- The rate you actually earn in a year once compounding is included: (1 + APR/n)^n − 1. A 4% APR compounded monthly is a 4.07% APY. Enter a rate as APY and the tool works the other way, backing out the nominal rate that sits behind it.
- After-tax interest
- The interest left once tax is taken off it, applied here at the end of the term as interest × (1 − rate). A 15% rate on $10,358.29 of compound interest leaves $8,804.54 in the example. Set the rate to zero for a pre-tax view, or to your own rate on savings interest.
- Value in today's money
- The after-tax balance restated in present-day purchasing power, found by dividing it by (1 + inflation)^years. At 2% inflation over ten years the $42,804.54 after-tax balance is worth about $35,114.64 today — a reminder that a future number buys less than it looks.
- Effective annual rate (EAR)
- The single yearly rate a nominal rate is worth once its compounding is folded in — the same idea as APY. The tool derives it first, then takes its twelfth root to get the monthly rate that drives the compound simulation, so every compounding frequency is honoured exactly.
- Growth multiple
- The ending balance divided by everything you paid in — a quick read on how hard the account worked. The default plan finishes at 1.30 times the $34,000 deposited, and because it is built on the balance you actually reach it already reflects the interest earned.
- Deposit timing
- Whether a deposit arrives at a period's start or its close. One placed at the start earns interest that very period, so begin-timing ends a touch ahead of end-timing for identical amounts — a minor effect that builds up over a long term.
Good to know
Interest earned: the number worth watching
Most savings tools lead with an ending balance, but that figure quietly mixes two very different things: the money you put in and the money the account actually made for you. This calculator separates them and puts the second one first, because the interest earned is what tells you whether an account is doing its job. At the default inputs — $10,000 to start, $200 added at the end of every month, a 4% APR compounded monthly, held for ten years — the balance finishes at $44,358.29, but $34,000 of that is simply your own deposits. The interest, the part the bank contributed, is $10,358.29, and that is the headline. Framing it this way changes the questions you ask. Instead of being impressed by a five-figure ending balance, you can see that a decade of a typical savings rate turned $34,000 of your money into $10,358.29 of earnings, judge whether that is worth it, and compare it fairly against another account or another use for the cash. The tool still shows the ending balance, the total you paid in, and how the two split inside a single ring chart, so the composition is never hidden. But by making interest the star it keeps your attention on the thing you are really shopping for when you choose where to keep your savings: the return, not the pile that includes your own contributions. Treat each figure here as a projection drawn from the numbers you supply — a way to weigh options, never a promise of any outcome.
Simple versus compound, and the bonus in between
There are two honest ways to pay interest on savings, and the difference between them is what this tool exists to show. Simple interest rewards only the money you contribute: your opening balance earns the rate across the whole term, each later deposit earns it for the span it stays in the account, and the interest itself never earns a thing — it is set aside rather than reinvested. Compound interest instead folds each interest payment into the balance, so from the next period onward that interest earns interest too, and the effect snowballs the longer the money stays. The calculator runs both on the same deposits and the same rate, then names the gap between them the compounding bonus. In the default plan simple interest would earn $8,760.00 while compounding earns $10,358.29, so the bonus is $1,598.29 — nearly a fifth again on top of the flat figure, earned for doing nothing but leaving the interest where it landed. Seeing the two side by side makes an abstract idea concrete. Compounding is often described as magic, but here it is just a number you can point to, one that you can watch grow as you lengthen the term or raise the rate. It also sharpens what to look for in an account: two accounts quoting the same rate can pay different amounts depending on whether and how often they compound, and this split is where that difference shows up.
When compounding quietly loses
It is tempting to treat compounding as always better, but that is not quite true, and a calculator that pretended otherwise would be hiding something. Inside a single compounding period the balance grows in one smooth step at the end, whereas simple interest accrues in a straight line throughout. Over a full period or more the compound curve pulls ahead, because it has had a chance to start earning on its own interest. Over less than one period it actually trails, because the compound payment has not landed yet while simple interest has been accruing the whole time. The practical upshot is that for a short term at a low compounding frequency — say six months at annual compounding — flat simple interest earns a little more, and the compounding bonus comes out negative. That is why this tool shows the bonus with its sign rather than assuming it is always a gain, and flags the case in plain language when it happens. It is a small effect and it reverses the moment the term runs long enough for interest to compound at least once, but it is real, and it is exactly the sort of edge that separates an honest model from a marketing chart. If you ever see the bonus dip below zero here, it is not a bug — it is the arithmetic of compounding over a stub period, shown rather than swept away.
How often interest is added: frequency matters
The rate is only half of what an account pays; the other half is how often it hands you the interest. Adding interest to the balance more frequently lets each payment start earning sooner, so for one and the same nominal rate a higher compounding frequency produces a higher effective yield and more interest earned. A 4% rate compounded once a year is worth an effective 4.00%; compounded monthly it becomes about 4.07%; compounded daily, a hair more again. The gaps look tiny as percentages but they are pure extra return for no extra deposit, and they widen over long terms and larger balances. This calculator holds your nominal rate steady and lays out the interest earned at every frequency from annual through daily, so you can see the frequency effect in isolation rather than tangled up with a rate change. It is a genuinely useful comparison when you are weighing accounts, because banks do not all compound the same way, and one advertising a slightly lower rate that compounds daily can out-earn a rival quoting a higher rate that compounds annually. One thing a change of frequency leaves alone, for a fixed nominal rate, is simple interest: with nothing added back to the base there is no compounding to speed up, so at the same nominal rate the simple figure holds whatever frequency you pick. Work in APY mode and the picture shifts a touch — raising the frequency re-derives a slightly lower nominal rate behind the yield, which does nudge the simple figure; the clean comparison is the one that keeps a nominal rate fixed. Either way the contrast is the lesson — frequency is a compounding story from start to finish.
APR and APY: two names for one rate
Rates on savings are quoted in two ways, and mixing them up is an easy route to mispricing an account. Take APR first — the annual percentage rate — the nominal figure quoted before compounding enters the picture, which needs a compounding frequency beside it to be precise. APY — the annual percentage yield — is instead the effective rate earned across a year once that compounding is folded in, so it is never below the APR it springs from. The link is exact: APY = (1 + APR ÷ n)^n − 1, with n the count of compounding periods in a year. This tool lets you enter whichever your bank gave you. In APR mode you type the nominal rate and choose a frequency, and it shows you the effective yield that results. In APY mode you type the effective yield directly, and it backs out the nominal rate hiding behind it so that the simple-interest comparison stays fair — simple interest, after all, is defined on the nominal rate, not the effective one. Either way you land on the same compound result for a matching frequency, because the two are just different descriptions of the same account. Knowing which is which protects you when you compare offers: an account is only fairly judged against another on the same footing, APY against APY or APR-plus-frequency against the same, and this tool keeps both visible so you are never accidentally holding a nominal figure up against an effective one.
Deposits, timing, and how each dollar earns
A lump sum left alone is the simplest case, but most people keep adding to their savings, so the calculator lets you pay in a regular amount monthly, quarterly or yearly on top of your opening balance — or choose none for a pure lump-sum view. What matters is understanding that not every dollar earns for the same length of time. Your opening balance is present from day one and earns across the entire term. A deposit made in year seven only earns for the three years that remain. The tool accounts for this precisely: in the compound path each deposit starts compounding from the month it arrives, and in the simple path each one earns flat interest only for the months it is actually in the account. That is why, in the default plan, $34,000 of deposits produces less interest than the same sum would if it had all been there from the start — much of it simply had less time to work. Timing within a period matters too, if only a little. A deposit placed at the beginning of a period earns interest that period, while one placed at the end does not, so begin-of-period saving finishes slightly ahead of end-of-period saving for identical amounts. The advanced options let you switch between the two, with end-of-period set as the sensible default. The broader point is that when money arrives is not a footnote — it is one of the levers that decides how much interest you finish with.
Tax on the interest, and what you keep
Interest from an everyday savings account is normally taxed, and a projection that skips that will flatter what you truly keep. This calculator applies tax to the interest — never to your deposits, which are your own money already taxed — and does so at the end of the term as a clean interest × (1 − rate). At the default 15% on $10,358.29 of compound interest, that leaves $8,804.54 of after-tax interest, the figure that genuinely ends up yours. Applying the tax at the end keeps the number transparent and symmetrical between the compound and simple paths: whichever way the interest was earned, the same fraction is taken off, so the after-tax figure is always exactly the interest times one minus your rate. The rate to enter is the one that applies to savings interest in your situation, which is not necessarily the rate on your wages and can differ from one account type to another. Should the money sit in a tax-sheltered account, or should you just want the pre-tax picture first, drop the rate to zero and the after-tax and pre-tax figures converge. One deliberate simplification: the tool uses a single flat rate and models none of the brackets, allowances or thresholds a real tax return would apply, so its tax line is a planning estimate, useful for comparing scenarios, not a calculation of what you will owe. For anything that hinges on the exact figure, treat it as a prompt to check the rules that apply to you.
Inflation and what the money will really buy
A balance that looks comfortable years out will purchase less than the same figure does today, because inflation keeps chipping away at what each unit of money is worth. To reflect that, the calculator restates the after-tax balance in present-day purchasing power, dividing it by one plus the inflation rate raised to the number of years. At the default 2% over a decade, the $42,804.54 after-tax balance is worth roughly $35,114.64 in current terms. Notice which figure gets deflated — the after-tax balance, the amount you genuinely keep once tax is paid, rather than a flattering headline — so the real value reckons with both drags together. Your statement still shows the larger nominal number; inflation touches only what that number can buy at the till, so the real value lands beneath the nominal one while leaving it intact. Holding the two next to each other is the entire idea: one says how big the balance looks, the other says what it will actually purchase — and for a modest savings rate the difference can be sobering, sometimes shrinking the real gain to almost nothing once prices are accounted for. Of every input, inflation is the hardest to pin down, since prices over a decade are anyone's guess, so the tool keeps the one rate you enter constant and asks you to read the real value as a rough gauge of buying power rather than a firm forecast.
Reading the chart, the frequency bars and the table
The visuals are where the interest story turns from a single number into something you can trace. The growth chart draws two lines: the compound balance and, beneath it, the simple-interest balance for the identical deposits and rate. At the outset the pair run close together, since compounding has barely begun to act; as the years pass they diverge, and the growing space between them is the compounding bonus building month upon month rather than landing in one lump. The frequency comparison isolates a separate lever, laying the interest your nominal rate earns at each compounding schedule — annual through daily — one beside the next, so the frequency effect is easy to gauge on its own. Where the chart gives shape, the schedule gives detail. Line by line it sets out the deposits paid in, the interest credited that period, and the compound and simple balances together, letting you watch the compound column edge steadily past the simple one. Reading down it also reveals the account's rhythm: how an early deposit has years to work while a late one barely stirs the total, and how the interest figure climbs as the balance it is charged on climbs. Taken together the three views turn a headline like $10,358.29 of interest into something you can follow from the first month through to the last, rather than accept on trust.
Realistic inputs, the model's limits, and reading results as estimates
Read every output as a projection shaped by the numbers you provide, never a guarantee about a specific account, and not financial, tax, legal or other professional advice. Sound inputs come first: take the rate and the compounding schedule from the account's own terms rather than guessing, use the tax rate that truly applies to your savings interest, and choose a deposit you can sustain through lean months. Then understand what the model streamlines, so you read it with fair expectations. It runs a single clean monthly step and collapses every compounding schedule into an equivalent monthly rate — exact for the effective yield, yet tidier than a bank that might accrue daily and credit monthly. It levies one flat tax rate at the end of the term and models none of the bands or allowances a real return would apply. It keeps the rate, the compounding, the tax rate and the inflation rate constant for the entire span, whereas real accounts carry rates that drift, promotional offers that lapse, and variable yields a bank can revise at will. It also assumes each deposit lands precisely on schedule, which life seldom manages. None of that renders the numbers pointless; it makes them a means to compare accounts and size outcomes, not a contract. Before moving real money, confirm the current rate, compounding and terms with the bank, and consult a qualified professional about anything — tax above all — that hinges on your own circumstances.
Frequently asked questions
What is the difference between simple and compound interest here?
Simple interest rewards only the money you contribute: your starting balance earns the rate for the whole term and each deposit earns it for the span it stays in the account, never more. Compound interest adds each interest payment back to the balance, so that interest goes on to earn interest of its own. On the default plan — $10,000 plus $200 a month at 4% for ten years — simple interest comes to $8,760.00 while compound interest reaches $10,358.29. The tool shows both and lets you switch which one is the headline, so you can see exactly what compounding is worth on your own numbers.
What is the compounding bonus?
It is compound interest minus simple interest — the extra you earn purely because interest is allowed to earn interest, pulled out as a single figure. In the example it is $1,598.29, the distance between $10,358.29 of compound interest and $8,760.00 of simple interest. It grows with time and with the rate, since both give interest more chances to build on itself. The tool shows it signed rather than always positive, because there is one case where it flips negative, covered in the next answer.
Can compound interest ever earn less than simple interest?
Yes, over a short term at a low compounding frequency. Inside a single compounding period a smooth compound curve grows a touch slower than a straight simple-interest line, so for less than a year at annual compounding, simple interest can come out ahead and the compounding bonus turns negative. Try six months at annual compounding and you will see it. It reverses as soon as the term runs long enough for interest to start earning interest, which is why the tool reports the bonus honestly with its sign rather than assuming compounding always wins.
How does the compounding frequency change the interest?
For the same nominal rate, adding interest to the balance more often lets it start earning sooner, so a higher frequency lifts the effective yield and the interest earned. A 4% rate is worth an effective 4.00% compounded yearly but about 4.07% compounded monthly and a shade more compounded daily. The tool holds your nominal rate fixed and lays the interest at every frequency from yearly to daily one next to another, so the worth of the compounding schedule alone is clear. At a fixed nominal rate, simple interest ignores frequency entirely, because it never compounds.
Do I enter my rate as APR or as APY?
Use whichever your bank quotes. APR is the nominal rate and wants a compounding frequency beside it; the tool then derives the effective yield for you. APY is already the effective yield, so if that is what you were given, flip to APY and the tool recovers the nominal rate behind it to keep the simple-interest comparison honest. For a matching frequency the compound result lands in the same place either way — the two modes simply describe one account from two angles.
How is tax on interest applied?
Tax applies to the interest, not to the deposits — those are your own money already — and the tool takes it at the end of the term as interest × (1 − your rate). At 15% on $10,358.29 of compound interest, $8,804.54 of after-tax interest remains in the example. Enter zero for the pre-tax view, or use whatever rate applies to savings interest for you; that figure often differs from the rate on earned income, and can be zero inside a sheltered account.
What does the value in today's money mean?
Inflation leaves the number on your statement alone but wears down what it can buy, so alongside the after-tax balance the tool shows that balance in present-day purchasing power. It divides by (1 + inflation)^years: at 2% over ten years, the $42,804.54 after-tax balance is worth about $35,114.64 in today's money. Pairing the two is the point — the nominal figure tells you how large the balance looks, and the real figure tells you what it will actually buy when you come to spend it.
Does the calculator include monthly deposits?
Yes. On top of the starting balance you can pay in a regular amount monthly, quarterly or yearly — or choose none for a lump-sum-only view. Each deposit is added on schedule and starts earning from then on, and in the simple path each one earns interest only for the months it is actually in the account. The total you pay in is reported separately from the interest, so you can always see how much of the final balance is your own money and how much the account added.
Does begin-of-period or end-of-period timing matter?
A little, and it adds up over a long term. Money paid in at a period's start earns interest during that period, whereas money paid at the close does not, so begin-of-period timing ends slightly ahead of end-of-period timing for the same amounts. The advanced options let you switch between the two; the tool defaults to end-of-period, the more common and more cautious assumption for regular saving.
How accurate is the projection?
The mechanics are exact for the assumptions you give: the compound path reproduces the standard future-value maths to the cent, and the simple path is the exact principal × rate × time for every deposit. What the tool cannot know is the future — it assumes the rate, compounding, tax and inflation you enter hold steady for the whole term, whereas real savings rates move, promotional rates expire, and tax rules change. Treat the figures as a clear, honest model for comparing scenarios, not a guarantee of what any particular account will pay.
Why is the interest smaller than I expected?
Usually it is the rate and the term doing exactly what the maths says, just less dramatically than headlines suggest. Ordinary savings rates are modest, so over a few years the interest is a smaller slice of the balance than your deposits are — in the default plan the $10,358.29 of interest sits against $34,000 you paid in. Tax trims it further, and inflation can erode most of what is left in real terms. Lengthening the term, raising the rate, or compounding more often are the levers that grow the interest, and the tool lets you test each one.
How is this different from the other savings calculators here?
This one keeps the spotlight on the interest itself and on the compound-versus-simple split, rather than on an ending balance, a savings goal, or the fees that eat into an account. It is the tool for the question "how much interest will this actually earn, and how much of that is the compounding?" For projecting toward a target, planning a monthly amount, or seeing how account fees drag on growth, the related calculators are a better fit — this one is built to make the interest, and the compounding bonus behind it, the clear headline.
Is this financial or tax advice?
No. Each figure is a projection the tool derives from your inputs, and none of it counts as advice — not on investments, banking, tax, law or accounting. Real accounts behave differently: rates shift, interest may be credited on schedules the model smooths over, and how interest is taxed turns on where you live and your own situation. The worked example is there to show how the parts connect, not to predict any bank's payout. Lean on it to weigh options and frame sharper questions, then check the details with your bank — and, for anything tax-related, a qualified professional — before committing money.