Use this free compound interest calculator to see how your savings or investments could grow in Australia. Enter a starting balance, regular deposits (weekly, fortnightly, monthly, quarterly or yearly), an interest rate and a time frame, then choose how often interest compounds. You’ll see your projected balance, total contributions and interest earned, with a year-by-year breakdown.
How to use this compound interest calculator
- Starting balance – the amount you have saved or invested today.
- Regular contribution and frequency – how much you add, and whether that’s weekly, fortnightly, monthly, quarterly or yearly.
- Interest rate – the annual rate or return you want to test, such as a savings account rate or a long-term return assumption.
- Compounding frequency – how often interest is added to the balance: daily, monthly, quarterly, half-yearly or annually.
- Years – how long the money stays saved or invested.
- Contribution timing – whether deposits go in at the start or the end of each period.
- Inflation rate (optional) – shows what the final balance could be worth in today’s dollars.
The results show your projected balance, the total you contributed and the interest earned. Open the year-by-year table to see how the interest portion grows over time.
What is compound interest?
Compound interest is interest earned on your original money and on the interest it has already earned. Simple interest is only ever paid on the original amount, so compounding makes a balance grow faster the longer it’s left alone.
For example, $10,000 earning 6% a year, compounded annually, earns $600 in the first year. In the second year it earns 6% on $10,600, which is $636. After ten years the balance is about $17,908 without adding another dollar.
Compound interest formula
For a lump sum, the compound interest formula is:
A = P × (1 + r/n)n×t
- A = the final amount
- P = the starting balance (principal)
- r = the annual interest rate as a decimal (6% = 0.06)
- n = the number of times interest compounds each year (12 for monthly)
- t = the number of years
With a regular deposit (PMT) made at the end of each compounding period, add the future value of those deposits:
A = P × (1 + r/n)n×t + PMT × [((1 + r/n)n×t − 1) ÷ (r/n)]
If deposits are made at the start of each period, multiply the deposit part by (1 + r/n). When deposits and compounding happen at different frequencies, such as fortnightly deposits with monthly compounding, the calculator converts the rate into an equivalent rate for each deposit period.
To check the default example in Excel or Google Sheets, use =FV(6%/12, 10*12, -250, -10000), which returns $59,163.80.
Worked example
At the default settings – a $10,000 starting balance, $250 added at the end of every month and 6% a year compounded monthly for 10 years – the projected balance is about $59,164. You would have contributed $40,000, so about $19,164 is interest.
| After | Total contributed | Interest earned | Balance |
|---|---|---|---|
| 1 year | $13,000 | $701 | $13,701 |
| 5 years | $25,000 | $5,931 | $30,931 |
| 10 years | $40,000 | $19,164 | $59,164 |
| 20 years | $70,000 | $78,612 | $148,612 |
| 30 years | $100,000 | $211,355 | $311,355 |
By around year 19 the interest earned overtakes the money you put in. Time does much of the heavy lifting, which is why starting early can matter more than starting big.
Compound interest vs simple interest
With simple interest you earn the same dollar amount every year. With compound interest, each year’s interest is bigger than the last. Here’s the difference on $10,000 at 6% a year over 10 years with no extra deposits:
| Method | Interest earned | Final balance |
|---|---|---|
| Simple interest | $6,000 | $16,000 |
| Compounded annually | $7,908 | $17,908 |
| Compounded monthly | $8,194 | $18,194 |
How compounding frequency changes the result
The more often interest compounds, the slightly higher the result. Here’s $10,000 at 5% a year over 10 years with no deposits:
| Compounding | Final balance |
|---|---|
| Annually | $16,288.95 |
| Half-yearly | $16,386.16 |
| Quarterly | $16,436.19 |
| Monthly | $16,470.09 |
| Daily | $16,486.65 |
Moving from annual to monthly compounding adds about $181 here, while lifting the rate from 5% to 6% (compounded monthly) adds more than $1,700. The rate and the time frame matter far more than the compounding frequency.
How long does it take to double your money? The rule of 72
Divide 72 by the annual interest rate to estimate how many years it takes for compound interest to double a balance. At 6%, money doubles in about 12 years (72 ÷ 6). At 4% it takes about 18 years, and at 8% about 9 years. It’s a quick estimate: at 6% compounded annually, the exact figure is about 11.9 years.
Compound interest in Australia
Savings accounts
Many Australian savings accounts calculate interest daily and pay it into the account monthly. Once it’s paid, that interest starts earning interest too, so monthly compounding is a sensible setting for most savings accounts. Bonus-rate accounts often pay the full rate only when you meet conditions such as a minimum monthly deposit, so it’s worth testing the base rate as well.
Term deposits
Term deposits may pay interest monthly, annually or at maturity. Interest only compounds if it’s added back to the deposit or rolled over. If it’s paid out to another account, the deposit grows more like simple interest.
Super and investments
Superannuation and investments such as shares or ETFs can also compound when earnings are reinvested, but returns aren’t guaranteed and can be negative in some years. Use a conservative return assumption and treat the result as an illustration, not a forecast.
Tax and inflation
Interest earned on savings is generally assessable income and taxed at your marginal rate, and investment earnings in super’s accumulation phase are generally taxed at up to 15%. This calculator doesn’t deduct tax or fees. Add an inflation rate to see what your projected balance could be worth in today’s dollars.
How to read the results
Projected balance is the modelled end value after the chosen number of years. Total contributed is your starting balance plus every regular deposit, and interest earned is everything above that. If you enter an inflation rate, in today’s dollars shows the projected balance adjusted for inflation.
The chart and year-by-year table use the same rate every year, so they show a smooth path rather than real-world ups and downs. Try a lower rate or a shorter time frame to see how sensitive the result is.
Assumptions and limitations
- The interest rate or return stays the same for the whole period and compounds at the frequency you choose.
- Regular contributions are the same amount each period and are made at the start or end of each period, as selected.
- There are no withdrawals, missed contributions or one-off deposits.
- Fees, transaction costs and tax are excluded. Inflation is only applied if you enter a rate.
- The result doesn’t account for the risk, liquidity or suitability of any product or investment.
Compound interest calculator FAQs
How much will $10,000 grow in 10 years with compound interest?
At 5% a year compounded monthly, $10,000 grows to about $16,470 in 10 years with no further deposits. At 6% it reaches about $18,194. Adding $250 a month at 6% lifts the balance to about $59,164.
How do I calculate compound interest monthly?
Divide the annual rate by 12 and multiply the number of years by 12, then use A = P × (1 + r/12)12×t. For $10,000 at 6% over 10 years, that’s 10,000 × 1.005120 = $18,193.97. Set the compounding frequency to monthly and the calculator does this for you.
Is interest compounded daily or monthly in Australia?
It depends on the product. Many savings accounts calculate interest daily but pay it monthly, which means it compounds monthly. Check your account’s terms, then compare daily and monthly compounding in the calculator – the difference is usually small.
What is the difference between compound interest and simple interest?
Simple interest is paid only on the original amount. Compound interest is paid on the original amount plus any interest already earned, so the balance grows faster over time.
Can I add deposits weekly or fortnightly?
Yes. Choose weekly, fortnightly, monthly, quarterly or yearly contributions, which makes it easy to match your pay cycle.
Does it matter if I deposit at the start or end of the month?
Yes, slightly. Deposits made at the start of each period earn interest for one extra period. In the default example, switching to start-of-month deposits lifts the 10-year balance from about $59,164 to about $59,369.
How long does it take to double money with compound interest?
Use the rule of 72: divide 72 by the annual rate. At 6% a balance doubles in roughly 12 years, and at 8% in roughly 9 years.
Is compound interest the same as an investment return?
Not quite. A savings account usually pays a stated interest rate, while investment returns rise and fall. The calculator applies a steady compounded rate either way, so for investments treat the result as an illustration rather than guaranteed interest.
Is compound interest taxed in Australia?
Interest you earn is generally assessable income, so it’s taxed at your marginal rate. The calculator shows results before tax. A tax adviser can explain how tax applies to your situation.
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Last updated: 5 November 2026
This calculator and supporting information provide general estimates only. They do not take account of every product rule, tax consequence or personal circumstance and are not financial, tax, credit or legal advice.