Compound interest calculator

See how a deposit grows with compound interest. Compare daily, monthly and yearly compounding with simple interest, before and after tax.

By OpenBookMoney Editors · Free, no sign-up · Updated Oct 15, 2026

Interest calculator

See what a deposit earns with simple or compound interest — before and after tax.

Your marginal rate on interest income. Use 0 for tax-advantaged accounts.
Balance after tax $11,964 $1,964 interest after tax · 19.64% net return
Gross interest $2,518
Estimated tax $554
Balance before tax $12,518
Effective annual yield (APY) 4.59%

Compounding earns you $268 more than simple interest over this term.

Balance over time Year 5 · Balance $12,518 · Interest $2,518 ($1,964 after tax)
Deposit Interest after tax Tax

Year-by-year breakdown

Year Balance Interest Tax After tax
1 $10,459 $459 $101 $10,358
2 $10,940 $940 $207 $10,733
3 $11,442 $1,442 $317 $11,125
4 $11,968 $1,968 $433 $11,535
5 $12,518 $2,518 $554 $11,964

How it’s calculated

Balance = P × (1 + r/n)^(n × t), where P is your deposit, r the annual rate, n the compounding periods per year and t the term in years. Interest after tax = (Balance − P) × (1 − tax rate). APY = (1 + r/n)^n − 1.

Assumes a fixed rate and that tax is applied to the total interest earned. In many countries interest is taxed every year, so your actual after-tax result may differ. Estimates only — not financial advice.

How to use the compound interest calculator

  1. Choose compound or simple interest.
  2. Enter your initial deposit and the annual interest rate.
  3. Set the term in years or months and the compounding frequency: daily, monthly, quarterly or yearly.
  4. Add a tax rate on interest to see your result after tax.

The year-by-year table shows your balance and the interest earned each year.

The compound interest formula

A = P × (1 + r ÷ n)n × t
A is the final balance, P the deposit, r the annual rate as a decimal, n the number of compounding periods per year and t the number of years.

With compound interest, each period’s interest is added to the balance, so the next period earns interest on a larger amount. Simple interest is only ever paid on the original deposit: interest = P × r × t.

Example: $10,000 at 5% for 10 years

Hypothetical $10,000 deposit at a 5% annual rate.
MethodFinal balanceInterest earned
Simple interest$15,000.00$5,000.00
Compounded yearly$16,288.95$6,288.95
Compounded monthly$16,470.09$6,470.09
Compounded daily$16,486.65$6,486.65

Compounding adds almost $1,500 over simple interest here. How often interest compounds matters less: daily compounding beats monthly by only about $17. If you pay 22% tax on the interest, the monthly result is about $15,047.

APY: the rate that includes compounding

Banks often quote the annual percentage yield (APY), which already includes the effect of compounding: APY = (1 + r ÷ n)n − 1. A 5% rate compounded monthly equals an APY of about 5.12%. Compare savings accounts by APY, and read our guide to APR vs. APY for more.

How to make compound interest work for you

  • Start early. Time does most of the work: the longer money compounds, the faster it grows.
  • Look for a higher APY. Our guide to high-yield savings accounts explains what to compare.
  • Leave the interest in. Withdrawing interest turns compound growth back into simple interest.
  • Add money regularly. This calculator models a single deposit. To include monthly contributions, use our savings goal calculator or investment calculator.
  • Watch out on debt. Compounding works against you on credit cards and loans, so pay high-rate debt down first.

Frequently asked questions

How often is interest compounded?

It depends on the account. Many savings accounts compound daily and pay monthly; some CDs compound monthly or quarterly. The APY on the account already reflects how often it compounds.

How long does it take to double my money?

A quick estimate is the Rule of 72: divide 72 by the annual rate. At 5%, money doubles in about 14.4 years. Our Rule of 72 calculator does the math for any rate.

What is the difference between simple and compound interest?

Simple interest is paid only on the original amount. Compound interest is also paid on interest you’ve already earned, so the balance grows faster over time.

Is interest taxed?

In many countries, including the US, interest from savings accounts and CDs is taxable income, usually in the year it’s earned. Enter your tax rate to estimate the after-tax result.

Does inflation affect my interest?

Yes. Your real return is roughly your interest rate minus inflation. Check it with our inflation calculator.

Results assume a fixed rate and are estimates for illustration, not financial advice.