How interest is calculated can greatly affect your savings. The more often interest is compounded, or added to your account, the more you earn. This calculator demonstrates how compounding can affect your savings, and how interest on your interest really adds up!
Compound Interest Calculator (Canadian)
Compound Interest Calculator (Canadian) Definitions
- Investment amount
- The amount of your initial investment.
- Interest rate
- The annual interest rate for your investment. The actual rate of return is largely dependent on the type of investments you select. For example, the annual return of the S&P/TSX Composite Index for the 10 year period from December 31, 2009 through December 31, 2019 was 3.9% (source spindices.com). Over the same period the total annual return (including dividends) was 6.9% (source spindices.com). Savings accounts at a bank or credit union may pay as little as 2% or less. It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment.
- Number of years for this investment.
- Compound interest
- Interest on an investment's interest, plus previous interest. The more frequently this occurs, the sooner your accumulated interest will generate additional interest. You should check with your financial institution to find out how often interest is being compounded on your particular investment.
- Yearly APY
- Annual percentage yield received if your investment is compounded yearly.
- Quarterly APY
- Annual percentage yield received if your investment is compounded quarterly.
- Monthly APY
- Annual percentage yield received if your investment is compounded monthly.
- Daily APY
- Annual percentage yield received if your investment is compounded daily.