Compound Interest Calculator
A compound interest calculator shows how money grows when interest is added on top of interest. Enter your starting amount, the annual rate, the number of years, and how often the interest compounds. The tool returns your final balance plus the boost compounding gives you over simple interest.
Account details on this page were last checked on August 23, 2026. We do not publish a bank’s APY here, because savings rates change without notice and a stale number is worse than none. Use the link by each account to see the rate the bank is paying right now. National averages come from the FDIC National Rates and Rate Caps.
Final balance
$8,235.05
Total interest
$3,235.05
Compounding advantage
+$735.05
The compound interest formula
- A = final balance
- P = principal (starting amount)
- r = annual interest rate (decimal)
- n = number of times interest compounds per year
- t = time in years
More frequent compounding means more interest. Daily compounding earns slightly more than monthly, which earns more than annual. Most HYSAs use daily compounding. For full methodology, see our methodology page.
The Rule of 72
The Rule of 72 is a quick way to guess how long it takes money to double. Divide 72 by the annual yield, which for a savings account is the APY. The answer is roughly the number of years.
| APY | Years to Double | Where you find this |
|---|---|---|
| 1% | 72 years | Old savings account |
| 3% | 24 years | Bonds |
| 4.5% | 16 years | Competitive online savings |
| 7% | 10.3 years | Long-term stock market average |
| 10% | 7.2 years | Aggressive growth investments |
The Rule of 72 is an estimate. For exact numbers, use the calculator above.
Frequently asked questions
What is compound interest in plain English?
Compound interest pays you interest on the interest you already earned. Year 1 you earn interest on the deposit. Year 2 you earn interest on the deposit plus year 1's interest. The total grows faster each year.
What is the Rule of 72?
The Rule of 72 estimates how long it takes money to double. Divide 72 by the annual yield, which for a savings account is the APY, because APY is the figure that already includes compounding. At 6% APY money doubles in about 12 years (72 / 6 = 12); at 4.5% APY, about 16 years. It is a mental shortcut, not exact.
What is the compound interest formula?
A = P(1 + r/n)^(nt). A is the final amount, P the principal, r the NOMINAL annual rate as a decimal, n how many times interest compounds per year, and t the number of years. r must be a nominal rate: putting an APY into this formula compounds the yield twice.
Does daily compounding beat monthly?
Yes, but barely, and the comparison only makes sense on a NOMINAL rate. A $10,000 deposit at a 5% nominal annual rate for 10 years: $16,470 with daily compounding versus $16,450 with monthly. The gap is about 0.12%. Note that this question cannot be asked of an APY: an APY already includes compounding, so a 5.00% APY is a 5.00% annual yield whatever frequency the bank uses internally.
How is APY different from APR?
A nominal annual rate, often labelled APR on borrowing products, is stated before compounding. APY is the same rate after compounding is counted. A 5.00% nominal rate compounded daily works out to an APY of about 5.13%. Banks advertise savings accounts by APY because it is the figure you can compare between accounts. This calculator takes the nominal rate; to convert one into an APY, use the APY calculator.
Why does compound interest matter for retirement?
Over 30 to 40 years, compounding does most of the work. A $5,000 yearly contribution at 7% return grows to about $500,000 in 30 years. The longer the time horizon, the bigger the compound effect.
What to do next
Want to know when the savings landscape changes?
We will email you when the Federal Reserve moves its target rate, when the FDIC publishes new national averages, and when we publish a newly verified comparison. We do not track individual banks’ APYs and we will not pretend to, so this is an infrequent email about things that genuinely change the picture.
Email only. We never send your calculator figures anywhere, they are worked out on your device. Every email has an unsubscribe link, and you can reply to any of them to come off the list.