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Compound interest calculator
See how a starting amount plus regular top-ups snowballs over time, and how much of the final balance is your money versus interest. Works for savings, term deposits and long-term investing.
Leave at $0 for a plain lump sum (like a term deposit).
Compounding is worked out at the frequency you choose, and interest is added before each top-up. Real returns vary and aren't guaranteed: this is an estimate to show the shape of growth, not a promise.
Enter a starting amount or a regular top-up to see how compound growth adds up over time.
How compound interest works
Compound interest is the reason time matters so much with money. Each period you earn a return not just on what you put in, but on all the returns you've already earned. That balance keeps earning on a bigger and bigger number, so growth starts slow and then accelerates.
Two things supercharge it: time and regular contributions. A modest amount added every week or month, left to compound for years, often ends up with more interest than principal. The year-by-year breakdown in the tool shows exactly when interest starts to overtake what you're putting in.
It works the same way for a bank term deposit (a known rate over a fixed term) and for longer-term investments like KiwiSaver (where the rate is an assumption, not a promise). For a plain lump sum, set the regular top-up to $0.
One honest caveat: this shows growth before tax and fees. In New Zealand, investment income is usually taxed (PIE tax or RWT) and funds charge fees, both of which trim real returns. Treat the figure as the optimistic, gross shape of things.
Compound interest questions, answered
- What is compound interest?
- Compound interest is interest earned on your interest, not just on your original balance. Each period the return is added to the balance, and the next period's return is worked out on that bigger balance. Over years, that snowball effect does most of the heavy lifting.
- How is compound interest calculated?
- Each period the balance is multiplied by (1 + the periodic rate), then your regular top-up is added. The periodic rate is the annual rate divided by how many periods there are in a year. This calculator repeats that for every period over your chosen term and totals up the interest.
- Does compounding frequency matter?
- Yes, a little. The more often interest compounds, the more you earn on the same headline rate, because interest starts earning interest sooner. Monthly compounding beats yearly on the same rate, though the difference is usually modest over short terms and grows over long ones.
- Can I use this for a term deposit?
- Yes. Set the regular top-up to $0 and enter your lump sum, rate and term. Note that banks may compound term deposits on a set schedule (for example quarterly or at maturity), so treat the result as a close estimate rather than an exact bank quote.
- Does this account for tax and fees?
- No. Real returns are reduced by tax (such as PIE tax or RWT on interest) and any fund fees, so your actual balance will usually be a bit lower than the gross figure shown here. It's a projection of growth before those costs.
- Are investment returns guaranteed?
- No. Bank interest rates are known in advance, but investment returns (like KiwiSaver or managed funds) vary year to year and can be negative. This tool assumes a steady average rate to show the shape of compounding, not a guaranteed outcome.
- What rate should I use?
- For a savings account or term deposit, use the advertised rate. For a longer-term investment, people often model a conservative long-run average and try a few rates to see the range. Small changes in rate make a big difference over decades, so it's worth testing a low and a high case.
Small amounts, compounded.
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Savings Goal Planner →KiwiSaver Max-Out Calculator →Related reading: Compound interest explained: how your money grows. Or see all our free NZ money calculators.