Entering an APY? Keep “Annually”: APY already includes compounding.

Annual deposits & timing

A deposit made once a year, e.g. a tax refund or bonus, in addition to any monthly contribution.

Make deposits at the

Monthly deposits at the start or end of each month, annual deposits at the start or end of each year. Earlier deposits earn more interest.

Taxes & inflation

Your federal marginal rate plus any state rate for a regular savings account. Use 0% for a Roth IRA or other tax-free account.

Prices rose 3.4% in the 12 months through August 2026 (BLS CPI-U). Used for the “today’s dollars” results.

Ending balance

$28,711.28

$10,000 to start plus $250 a month, after 5 years at 4% compounded annually

Initial deposit: 34.8%Contributions: 52.2%Interest: 12.9%$28,711ending balance
Initial deposit
$10,000.00
Contributions
$15,000.00
Interest
$3,711.28
Ending balance
$28,711.28

Total principal

$25,000

Total interest

$3,711

Interest on initial deposit

$2,167

Interest on contributions

$1,545

Buying power in today’s dollars

$24,291

APY (annual percentage yield)

4%

Real return after inflation

0.58%

At 3.4% inflation a year, $28,711 in 5 years will buy about what $24,291 buys today — rising prices take $4,420 of buying power.

Interest in a regular (taxable) savings account counts as income. At a 22% federal tax rate you would keep about $2,841 of this interest. Enter your rate under “Taxes & inflation”, or leave 0% for a Roth IRA or other tax-free account.

Balance by year

Yr 1 — Initial deposit: $10KYr 2 — Initial deposit: $10KYr 3 — Initial deposit: $10KYr 4 — Initial deposit: $10KYr 5 — Initial deposit: $10KYr 1 — Contributions: $3KYr 2 — Contributions: $6KYr 3 — Contributions: $9KYr 4 — Contributions: $12KYr 5 — Contributions: $15KYr 1 — Interest: $455Yr 2 — Interest: $1KYr 3 — Interest: $1.8KYr 4 — Interest: $2.7KYr 5 — Interest: $3.7K$0$7.5K$15K$23K$30KYr 1Yr 2Yr 3Yr 4Yr 5
  • Initial deposit
  • Contributions
  • Interest

Simple vs. compound interest on $10,000

Balance of a single $10,000 deposit at 4%; simple interest is never reinvested.
AfterWith simple interestCompounded annuallyExtra from compounding
1 year$10,400$10,400$0
2 years$10,800$10,816$16
3 years$11,200$11,249$49
5 years$12,000$12,167$167

Yearly schedule

Starting balance: $10,000 (not counted as a deposit)
YearDepositsInterestEnding balanceIn today’s dollars
1$3,000$455$13,455$13,012
2$3,000$593$17,047$15,945
3$3,000$737$20,784$18,800
4$3,000$886$24,670$21,582
5$3,000$1,041$28,711$24,291
Show monthly schedule

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