Interest on interest
Compound interest means earnings are added to the balance so future interest is calculated on a larger amount. More frequent compounding (monthly vs annually) usually grows the balance slightly faster at the same nominal rate.
Regular contributions often matter more than tiny rate differences over long periods — consistency beats timing the perfect rate.
What projections omit
Simple compound tools typically ignore taxes on interest, fees, inflation, and sequence-of-returns risk for investments. Cash savings and investment returns behave differently; past investment performance is not a guarantee.
Treat outputs as illustrations for education, not promises of future wealth.
Frequently asked questions
Is compound interest only for savings accounts?
No. Debt can compound too if unpaid interest is added to the balance. That is why carrying high-interest credit balances is costly.
Estimates and explanations only — not financial advice. See our disclaimer.