How It Works

This calculator shows how your money compounds over time—so you can see both your total investment and how much interest you’ll earn.

To get started, enter the following:

• Investment Amount: The amount of money you plan to invest as either a one-time contribution or as a repeating deposit.
• Investment Frequency: How often you’ll make that investment—just once, monthly, twice a year, or annually.
• Number of Years: The total amount of time you plan to keep your money invested, allowing it to grow and earn interest.

You will then see an estimate of how much interest you will earn over time with a fixed rate and interest compounding monthly. Change the compound frequency, interest rate, and whether or not the interest range is fixed to adjust your estimated earnings and predict the success of your investment.

What’s a “Good” Investment Return?

Investment returns vary a lot depending on the type of investment, the market, and other factors, and they’re never guaranteed. A “good” investment return depends on your goals, timeline, and how much risk you’re comfortable taking.

There’s no one-size-fits-all answer—but understanding historical averages can give you a helpful starting point.

• Stock Market (S&P 500): Historically averages about 10% annually over the long term.
• Bond Funds: U.S. government bond funds typically return 3% to 4%, while riskier bond funds can return more.
• High-Yield Savings Accounts: Currently offer around 4% to 5%, but rates can change.
• Certificates of Deposit (CDs): Usually fall in the 3% to 4% range, depending on the term.

As you use this calculator, try to base your interest rate inputs on the types of investments you’re actually considering. If you're just running a few “what-if” scenarios, using a range (like 2% to 8%) is a great way to explore the potential highs and lows of your investment strategy.

Understanding Risk

All investments involve some level of risk, but not all are equally risky. Some investments can fluctuate wildly, while others stay relatively stable. The key is knowing your risk tolerance and matching it to your goals.

Diversifying—spreading your money across different types of investments—can help reduce risk while still aiming for strong returns.

Here are some considerations for determining your own risk tolerance:

• Know Your Timeline: The more time you have before you need the money, the more risk you can generally afford to take. Long-term (10+ years): You might handle higher-risk investments like stocks. Short-term (1–3 years): Safer options like savings accounts or CDs make more sense.
• Financial Stability: If your basic expenses and emergency fund are covered, you may be in a better position to take on more investment risk than if you’re struggling to make ends meet.
• Comfort Level: Would a sudden drop in your investment make you panic and want to pull out? Or would you stay the course? How comfortable you are with dips and bumps is a big part of your personal risk tolerance.
• Goals: Are you investing for retirement in 30 years or saving for a down payment in three? The importance and urgency of your goal affects how much risk makes sense.

Investing is a powerful way to grow your money, but it comes with choices. By understanding how interest, time, and risk work together, you can make smarter decisions that align with your goals.