Compound Interest Calculator Ireland

Compound interest, without the mystery

Compound interest means earning interest on money that has already earned interest. Put €1,000 into an account earning a constant 5% a year, leave the interest there, and the balance becomes €1,050 after one year. In the second year, 5% applies to €1,050: another €52.50, bringing the balance to €1,102.50. The extra €2.50 is the first small sign of compounding.

With simple interest, the same example earns €50 each year on the original €1,000. With compound interest, the amount earning interest grows. The effect becomes more noticeable when the money remains invested for longer. These are mathematical examples, not current savings offers.

Investments can compound too, when returns remain invested. However, a share portfolio does not pay a fixed interest rate. Its value can fall, and dividends may change. This calculator uses a smooth assumed growth rate to explore a scenario; it does not predict the path of a market or guarantee an outcome. The US Securities and Exchange Commission’s calculator similarly treats the return as an estimate and lets users explore different rates.

Three numbers worth keeping separate

• Contributions: money you put in, including the initial amount and later deposits.
• Growth: the difference between the projected net balance and those contributions. It can be negative.
• Purchasing power: what the balance might buy after allowing for inflation.

A large final balance can partly reflect a large amount saved. That is why the calculator keeps your contributions visible beside growth: both matter, but they tell different stories.

What could €100, €300 or €500 a month become?

The following examples start with €0, add the same amount at the end of every month and assume a constant 5% effective annual return, with no fees or tax. All amounts are nominal and rounded to the nearest euro. The rate is illustrative, not a recommendation or forecast.

Source: Compound’s own calculations using the method below.

The useful question is not which row looks most impressive. It is which monthly amount you could maintain without repeatedly needing to take the money back. Changing the return assumption will change every result. Try a lower return as well as your central assumption before treating a target as achievable.

Try a goal instead of guessing a contribution

Choose Reach my goal, enter a target balance and select the years available. The calculator solves for the initial monthly contribution needed under your assumptions. If you have added annual contribution increases, the displayed amount is the starting payment, not a promise that payments remain fixed.

Choose Find my timeline to see the first monthly point at which a plan reaches its target within the selected horizon. “Not reached” means the scenario does not reach it within those years; it does not mean the goal is impossible under every plan. Goals use nominal euros and your selected tax treatment. The inflation switch changes the display, not the target you entered.

Why starting earlier changes the result

An earlier start gives each deposit more time to grow. It can also mean contributing more money overall. These are two separate advantages, and a fair comparison should show both.

For example, €300 a month for 25 years at the illustrative 5% rate grows to €175,720, from €90,000 contributed. Starting five years later and contributing for 20 years produces €121,741, from €72,000 contributed. At the same finishing date, the difference is €53,979. Of that gap, €18,000 is additional money paid in; the rest is the difference in modelled growth. There is no starting lump sum, tax or fee in this example.

The calculator’s “starting five years later” comparison shifts the initial deposit and life events five years forward. Starting cash remains outside the model without interest during the delay. Contribution increases continue to follow the original timeline, so check that setting when comparing plans. Money left outside a short delayed plan is not lost; it is simply excluded from that plan’s displayed balance.

Your savings plan does not have to be a straight line

Real household finances change. In Advanced, add a lump sum, pause regular deposits for a number of months, or increase the monthly amount from a chosen year. A pause stops regular contributions but leaves the existing balance invested. A scheduled lump sum still goes in during a pause.

This is useful for exploring parental leave, a period of study or a change in household costs. Event years refer to the beginning of the numbered year: an event in year five happens in month 49. A separate monthly increase is a fixed euro addition; the annual percentage increase applies to the original regular contribution. Check the annual breakdown to see the resulting amounts.

Two quiet influences: inflation and fees

Future euros are not the same as today’s euros

Inflation is a broad increase in prices that reduces what a unit of money can buy. Your own spending mix may rise faster or slower than the average. The European Central Bank explains how inflation measures changes across a basket of goods and services.

At an assumed 2% inflation rate, €100,000 received in 25 years has purchasing power equivalent to approximately €60,953 today. That does not mean money disappears from the account. It means prices in this illustration have risen while the nominal balance is measured in future euros. The 2% setting is an assumption, not a forecast of Irish inflation.

Use “today’s money” to adjust the chart and headline. The annual table stays in nominal euros so you can inspect the cash amounts. The inflation-adjusted contributions line represents the cumulative nominal contributions expressed in that year’s purchasing power; it is not a separate calculation of each deposit’s value on the date it was made.

A small annual fee can have a lasting effect

Fees reduce the amount left to grow. Consider €10,000 initially, €300 monthly and a 5% assumed effective annual return for 25 years. With no fees, the model ends at €209,584. With a 1% annual asset-based fee, applied proportionately each month, it ends at €177,937: a difference of €31,647, before tax.

That gap includes both fees and growth no longer earned on the deducted money. It is not simply the sum of the fee invoices. The calculator models a percentage charge on assets; fixed account fees, dealing charges, performance fees and currency-conversion costs need separate consideration. If your assumed return is already net of a fee, entering that fee again would deduct it twice.

Compound growth and Irish tax

Tax treatment depends on what you hold, your circumstances and when a taxable event happens. A single percentage applied to all investment growth would be misleading. The Advanced tax section supports two limited illustrations for an Irish-resident individual.

Revenue lists a 33% DIRT rate. For a simple annual illustration, €1,000 earning €40 gross interest leaves €26.80 after DIRT alone. Exemptions can apply, and Revenue notes that PRSI may also be payable in some circumstances. The calculator’s monthly-crediting assumption can differ from your account’s actual schedule. Revenue: DIRT rates · Deposit-interest overview.

Revenue gives a 33% CGT rate for most gains and an individual annual exemption of €1,270. This tool uses only the unused exemption available in the sale year; it does not accumulate an exemption for every year you hold an investment. With CGT selected, intermediate chart points estimate the proceeds of selling at that point. They do not represent actual annual sales. Revenue: calculating CGT.

Do not use the direct-share setting as a proxy for ETFs, investment funds, life policies or pensions. Those are outside this module, as are corporate investing and tax on dividends. A child’s savings projection also does not settle ownership, access or gift-tax questions. Current supported rates are held constant for the full illustration even though future rules may change.

What return should you enter?

For a deposit, start with the account’s advertised annual equivalent rate and check how long it applies, its balance limits and its crediting schedule. A promotional rate lasting a few months should not be assumed to continue for decades.

For an investment, there is no single “correct” future return. Explore several explicit assumptions. For example, changing an illustrative 5% to 3% or 7% shows sensitivity; these figures are not confidence intervals, recommended expected returns or probabilities. Save a plan, adjust its rate and use Compare to inspect the difference.

Averages can also conceal the effect of losses. A €100 investment that rises 20% and then falls 20% ends at €96, even though the two percentage changes average zero. This tool uses an effective annual compound growth assumption, not an arithmetic average of changing yearly returns. It does not simulate market volatility, the order of returns, or the chance of reaching a target.

How we calculate the results

The annual rate is treated as an effective annual rate. For a rate written as a decimal, the monthly rate is (1 + annual rate)^1/12 − 1. This avoids turning an entered 5% annual effective return into a slightly higher annual return by dividing it by 12 and compounding again.

Without fees, tax or contribution changes, the balance after n months is:

Starting amount × (1 + monthly rate)ⁿ + monthly contribution × ((1 + monthly rate)ⁿ − 1) ÷ monthly rate.

At a zero return, it is simply the starting amount plus all contributions. The actual engine steps through each month to allow for events and fees. It applies growth, deducts modelled DIRT where selected, applies the monthly fee factor, and then adds month-end contributions. The fee factor is (1 − annual fee)^1/12. CGT is estimated separately from the resulting balance and contribution cost basis.

Inflation-adjusted amounts divide the relevant future balance by (1 + assumed inflation)^years. Calculations retain precision internally; displayed euro amounts are rounded. The chart interpolates between monthly points for inspection, so an in-between readout is a visual estimate rather than an additional transaction date. Goal contributions round up to the next cent.

Frequently asked questions

Is this calculator free?

Yes. You can calculate, compare, save a plan on your device, share a link and export annual figures without creating an account.

Does switching back to Basic remove my advanced settings?

No. Fees, inflation, events and tax settings remain active. Basic changes which controls are visible. Reopen Advanced to inspect or change them.

Can I use it for a house deposit or emergency fund?

You can model regular savings towards either goal. The calculator does not assess whether a product is suitable, accessible when needed, or protected. A higher assumed investment return is not a substitute for knowing that essential money will be available on a particular date.

Can I model money for a child?

Yes, as a growth scenario: select the starting amount, deposits and years. The result is not a recommendation about trusts, account ownership or gifting. Those decisions need separate consideration under the relevant Irish rules.

Why does another calculator give a different answer?

Common reasons include using a nominal rather than effective annual rate, placing contributions at the start rather than end of the month, applying fees differently, or rounding each period. Check assumptions before assuming either result is wrong.

Are my figures saved or sent anywhere?

Calculations run in your browser. Selecting “Save on this device” stores a scenario in that browser’s local storage. Clearing site data removes those saved plans. Shared links contain the plan’s values in the link fragment, so share them only with people you want to see those figures. The calculator does not send your entries to a calculation server.

What does the export contain?

The CSV includes your main assumptions, life events and annual nominal figures. The printable summary records the current plan and assumptions. Both are illustrations, not account statements or tax returns. A saved scenario preserves the settings, while future calculator updates or tax-rule changes may produce different results when reopened.

Will the result happen in real life?

Only if the model’s assumptions match what happens, which is especially unlikely for a smooth investment return. Contributions may change, markets can fall, costs differ and tax rules evolve. Use the result to compare choices and understand sensitivities, then revisit the plan as circumstances change.