Every frequency, honest timing
Compound Interest Calculator - what your money grows to
Compound interest pays interest on your interest: a starting balance plus regular deposits grows faster every year, and this page draws exactly how - then shows what the end balance supports as a property deposit.
Your savings plan
Deposit frequency
Interest compounds
Deposits made at the
Balance after 10 years
$100,581
You put in
$75,000
Interest earned
$25,581
Interest share
25.4%
The curve, year by year
What that balance supports
As a 20% deposit, $100,581 supports a purchase around $505,000 before stamp duty and costs. Whether that purchase is any good is a different question - run it against your own criteria.
Interest is credited at the nominal periodic rate each compounding period; deposits ($6,500/yr here) are spread evenly across compounding periods. Savings rates change and tax on interest is not modelled. General information only.
Compounding is the deposit-saver's only leverage
While you are saving for a property, compound interest is the only mechanism working for you the way leverage later will: it pays you on money it already paid you. The order of importance surprises most people - years invested first, rate second, compounding frequency a distant third. Moving from annual to monthly compounding on $50,000 at 5% adds about $906 over a decade; adding one extra year of saving adds thousands.
The property angle matters at both ends. Before the purchase, this curve is your deposit timeline - and the end balance here feeds straight into the Deal Auditor as a 20% deposit, criteria and all. After the purchase, the same mathematics runs in reverse: money parked against your loan in an offset account earns your mortgage rate, tax free, which is why the offset calculator usually beats any savings account once you hold debt. And if you are weighing whether the deposit should go into property at all, the property vs shares comparison runs the same compounding honestly on both sides.
Frequently asked questions
How does compound interest work?
Compound interest pays interest on your interest. $10,000 at 5% earns $500 in year one; in year two the 5% applies to $10,500, earning $525, and the gap widens every year - $10,000 becomes $16,289 over 10 years without a single extra deposit. Add regular contributions and each deposit starts its own compounding clock, which is why starting early beats starting big.
What is the compound interest formula?
A = P(1 + r/n)^(nt), where P is the starting principal, r the annual rate as a decimal, n the number of compounding periods per year and t the years. $10,000 at 5% compounded monthly for 10 years is 10,000 x (1 + 0.05/12)^120 = $16,470. Regular deposits need the future-value-of-annuity formula on top - FV = c x ((1 + r/n)^(nt) - 1) / (r/n) - which is what this calculator computes for you, at any deposit and compounding frequency.
Does daily vs monthly compounding make much difference?
Far less than most people expect. $50,000 at 5% for 10 years grows to $81,445 with annual compounding, $82,350 with monthly and $82,433 with daily - the jump from annual to monthly is worth about $906, but monthly to daily adds only about $83. The rate itself and the years invested matter far more than the compounding frequency, which is why chasing a headline "daily compounding" account rarely moves the result.
Is it better to deposit at the start or the end of the period?
Start-of-period deposits (an annuity due) earn one extra period of interest on every contribution, making the contribution stream exactly (1 + r/n) times larger - about 0.4% more at 5% compounded monthly. It is a real but small edge: on $500 a month for 10 years at 5%, roughly $323. Flip the timing toggle above to see the exact difference for your numbers.
How much do I need to save for a house deposit?
A 20% deposit avoids lenders mortgage insurance on most loans, so a $600,000 purchase needs $120,000 plus stamp duty and costs. Saving $1,000 a month at 5% compounded monthly reaches $120,000 in about 8 years and 2 months - compound interest contributes roughly $22,700 of it. This page feeds that end balance straight into the Deal Auditor so you can test what your deposit actually supports against your own criteria.