Monthly Interest Calculator

Multiply the balance by its monthly rate — the yearly rate cut into twelve equal slices. A $10,000 balance at a 5% annual rate earns $10,000 × 5% ÷ 12 = $41.67 in its first month. If interest compounds, later months earn a little more because the credited interest joins the balance and starts earning too; by the sixtieth month the same account is earning $108.86. If interest is simple, the monthly amount stays tied to your capital and only rises when you add a deposit. Enter your own balance and rate and the headline shows the first month straight away, with the last month in the hint.

Simple interest is charged only on the capital you contribute — your starting balance plus any deposits — so the interest itself never earns anything. Compound interest is added to the balance each month and then earns interest of its own, which makes every month's credit slightly larger than the one before. Over short spans the two are close: on $10,000 at 5% with $200 monthly for five years, simple pays $3,975.00 and compound pays $4,434.80, a $459.80 gap. Over long spans the gap becomes enormous, because compounding grows on itself while simple interest grows in a straight line. The toggle at the top switches between the two, and the comparison bars show both endings side by side.

Divide by twelve. A 5% annual rate is a 0.417% monthly rate (5 ÷ 12), a 6% rate is 0.5% a month, and a 3% rate is 0.25% a month. That monthly rate is what the calculator applies to your balance each month. If you compound daily instead, the daily rate is the annual figure divided by 365 — about 0.0137% a day at 5% — which is then compounded across the roughly 30.4 days in a month. The rate field displays the monthly rate for you as soon as you type an annual figure, so you never have to do the division yourself.

Not in the month you make them. This calculator follows the standard banking convention that recurring deposits land at the end of the month, after that month's interest has already been worked out. So a deposit made in month three begins earning in month four. It is the same assumption a bank makes when it credits interest on the balance held through the period, and it is why the interest on your deposits builds up more slowly than the interest on your starting balance. If your account instead posts deposits at the start of the month, real interest will run a touch higher than the estimate here.

It widens the longer the money is left, because compounding feeds on itself while simple interest grows in a straight line. On $10,000 at 5% with a $200 monthly deposit, compounding beats simple interest by $459.80 over five years — noticeable but modest. Stretch the same idea to fifty years with a $100 monthly deposit and simple interest ends at $169,875.00 while compound interest reaches $388,059.03, a difference of $218,184.03. The comparison bars and the balance chart make this visible: over a couple of years the two lines almost overlap, but over decades the compound line pulls sharply away. Time, not the size of the rate, is what turns a small monthly edge into a large one.

It rarely changes much. Daily compounding folds interest back into the balance every day rather than once a month, which lifts a 5% rate's yield from 5.116% to 5.127% — about a hundredth of a percentage point. In dollars, the default plan of $10,000 with $200 a month for five years ends at $26,434.80 compounded monthly and $26,444.75 compounded daily, under ten dollars apart. Choose the setting that matches your account's disclosure if you know it, but do not lose sleep over the choice: the annual rate and how long you save both matter far more than whether the compounding clock ticks daily or monthly.

APY, the annual percentage yield, is what your rate genuinely pays over a year once compounding is included. A 5% rate compounded monthly has an APY of 5.116%, because each month's interest earns a little extra interest before the year is out; compounded daily the APY is 5.127%. The stated rate describes the pace of accrual, while the APY describes the realized result — and for any compounding schedule the APY is at least as high as the rate, equal only when interest compounds once a year. Simple interest has no compounding, so its yield simply equals the stated rate. The calculator shows the APY next to the rate so you can compare accounts fairly.

Open the Tax & inflation panel and enter a rate, and the tool withholds tax on the interest once a year — at each twelve-month mark and again in the final month — then deducts it from the balance. Because the tax leaves the account, it also shrinks the base that compounds in later years, so the after-tax total is a genuine drag, not just a flat percentage skimmed off the top. The results show the tax paid and the interest you keep. At a 0% tax rate nothing is withheld; at 100% every dollar of interest is clawed back each year, which for an account with no deposits leaves the balance sitting exactly at its starting principal.

It restates your ending balance in today's money. Earning your way to $26,434.80 over five years sounds better than it spends if prices are climbing, so entering an inflation rate discounts the final figure back to current purchasing power. At 3% inflation, that $26,434.80 is worth about $22,802.89 in today's dollars. The setting changes only the real-value figure and the inflation line on the chart; it does not touch the interest you actually earn, which is still calculated on the nominal balance. Use it as a reality check on long horizons, where even mild inflation quietly erodes a chunk of the headline growth.

Nothing accrues, so the account earns no interest at all and simply collects your deposits. A $10,000 balance with $200 added monthly for two years ends at $14,800.00 — the starting balance plus $4,800 of deposits, and not a cent of interest. The calculator flags this with a "0% — deposits only" note and shows a flat interest line, which is a useful sanity check: it separates the money you contribute from the money the rate earns. It also makes plain that on a zero-rate account, simple and compound interest are identical, because there is no interest to compound in the first place.

Yes. Set the monthly deposit to zero and the tool becomes a straight balance-and-rate calculator: enter the amount, the annual rate and the number of months, and it shows the monthly interest, the total over the term and the ending balance. For a one-year $10,000 certificate at 5% compounded monthly, that is $511.62 of interest and a $10,511.62 balance. Pick Simple if your product pays interest out rather than reinvesting it — a $10,000 deposit at 6% for two years then pays a flat $1,200.00, ending at $11,200.00. Match the compounding setting to the product's disclosure for the closest figure.

No, and the difference is worth keeping straight. "Monthly interest" is just the interest a balance earns in a month — an amount of money. "Monthly compounding" is a schedule: how often earned interest is added back so it can earn more. You can have monthly interest without monthly compounding — a simple-interest account pays interest every month but never compounds it — and you can have interest that compounds daily yet is only credited to you monthly. This calculator reports the monthly interest as its headline and lets you set the compounding schedule separately, so the two ideas never get tangled together.

Yes. As compounding gets more frequent — monthly, then daily, then hourly — the yield keeps rising but toward a fixed limit rather than upward without end. Daily compounding already captures almost all of the available benefit: at 5% it reaches a 5.127% yield, and no schedule of discrete credits can push far past it. That is why this tool stops at daily rather than offering ever-finer options — the extra earned by going beyond daily is too small to matter for a real account. If you need the theoretical maximum from continuous compounding, a dedicated effective-rate tool covers it, but for planning a bank balance, daily is effectively the top.

It models interest, recurring deposits, an annual tax on interest and an inflation adjustment — and deliberately little else. It assumes a fixed rate for the whole term, so it will not track a variable or promotional rate that resets. It does not deduct account fees, enforce minimum balances, model withdrawals, or apply the day-count quirks (360 versus 365) that make a real statement differ by a few cents. Tax is treated as a single annual rate on interest, not the brackets, allowances or tax-sheltered accounts of any specific country. Treat the output as a clean planning estimate; for the exact figure, read your account's disclosure and match its rate, compounding and crediting rules.