Compounding frequency makes a smaller difference than most people expect. $10,000 at 7% for 20 years becomes $38,697 when compounded annually and $40,547 when compounded daily. Deposit timing is a bit larger: adding $300 at the start of each month instead of the end gives $912 more over 20 years.
Compounding frequency
| Compounding | Balance after 20 years |
|---|---|
| Annually | $38,697 |
| Quarterly | $40,064 |
| Monthly | $40,387 |
| Daily | $40,547 |
Deposit timing with $300 a month
| Deposit at | Balance after 20 years |
|---|---|
| End of month | $196,665 |
| Start of month | $197,577 |
Both effects are small next to the return rate and the number of years. Choose the setting that matches your account, then spend your time on the inputs that really move the result.
What we assumed
- $10,000 starting balance, 7% annual rate, 20 years.
- Deposit table includes the $10,000 start.
Related calculators: Compound Interest Calculator, Credit Card Payoff Calculator.
Questions people ask
What is APY?
APY is the yearly rate after compounding. A 7% nominal rate compounded monthly is about 7.23% APY.
Estimates for general education, not financial, tax or legal advice. Real results depend on your lender, employer, tax situation and location. See the disclaimer.