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✦ Tools & Resources

Compound Interest Calculator for Canada (2026)

Enter a starting amount, regular contributions, a rate of return and a number of years to see how your savings grow when interest starts earning interest. Adjust the numbers and watch the curve bend upward.

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Balance after {{ yearsLabel }}
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Total contributed{{ fInvested }}
Interest earned{{ fInterest }}
At {{ rateLabel }}, your money doubles roughly every {{ doubleYears }} (Rule of 72).
Growth over time
Total balance vs. the amount you put in.
Share:
By year {{ years }}, {{ interestShare }} of your balance is interest your money earned on its own, not money you deposited.
Assumes a constant rate of return and contributions at the end of each month. Estimates for general information only and not investment advice.
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✦ Good To Know

Compounding, Explained

Compound interest is interest earned on interest. In year one your deposit earns a return; in year two, both the deposit and last year's return earn a return. Left alone long enough, the interest ends up doing most of the work, which is why the chart above curves upward instead of climbing in a straight line.

Albert Einstein is often credited with calling compound interest "the eighth wonder of the world." Whether or not he actually said it, the idea holds: those who understand compounding earn it, and those who don't, pay it (usually to a credit card company).

Divide 72 by your annual return and you get the approximate number of years it takes your money to double. At 8%, that's about 9 years. At 3%, it's 24 years. This simple mental shortcut shows why the rate you earn matters so much over long periods.

Investor Mohnish Pabrai likes to frame wealth this way: it's all about the number of doublings you can string together. Ten doublings turns $10,000 into roughly $10 million. The catch is that the biggest doublings come last, so the game rewards people who start early and stay in.

Warren Buffett has said "my wealth has come from a combination of living in America, some lucky genes, and compound interest." He bought his first stock at 11 and still jokes he started too late. Over 99% of his net worth was built after his 50th birthday, which is compounding in action, not stock-picking magic.

The lesson from Buffett, Pabrai, and virtually every long-term investor is the same: time in the market beats timing the market. The most valuable input in the calculator above isn't the rate, it's the years.

How do taxes and inflation affect my growth?

In a non-registered account, interest is taxed every year at your marginal rate, so part of each year's return never gets to compound. Inside a TFSA, the growth stays tax-free, and inside an RRSP, the tax is deferred until you withdraw.

Inflation works quietly in the background: a 6% return with 2% inflation grows your purchasing power by roughly 4% a year. Run the calculator with that lower rate to see your result in today's dollars. To see how much tax an RRSP contribution could save you, try the RRSP Tax Savings Calculator. For the long view, including how your savings pass on to your family, see our estate planning service.

Historically, the broad stock market has returned around 10% per year before inflation (roughly 7% after), while GICs and high-interest savings accounts typically earn much less. A conservative planning number for a diversified portfolio is 5% to 7%. Past performance never guarantees future results, so it pays to run the calculator with a pessimistic and an optimistic rate.

One more thing worth knowing: where you compound matters as much as how fast. Growth inside a TFSA is completely tax-free, and an RRSP defers tax for decades. If you'd like help choosing the right account for your situation, call me at (905) 814-0111 and I'd be happy to walk you through it.

How is compound interest different from simple interest?

Simple interest is paid only on your original deposit. With compounding, you also earn a return on the interest already credited to you. The gap is small at first and widens every year: $10,000 at 5% for 20 years grows to $20,000 with simple interest and to about $26,533 when the return is added once a year.

Does it matter how often returns are credited?

It makes less difference than most people think. $10,000 at 5% for 10 years becomes about $16,289 with yearly crediting, $16,470 with monthly crediting and $16,487 with daily crediting. The rate and the number of years matter far more. When you compare savings accounts or GICs, look at the effective annual rate rather than the crediting schedule.

How do I use the calculator to plan my retirement savings?

Enter what you've already saved as the initial deposit, what you can set aside each month and the number of years until you retire. Then run it twice, once with a conservative rate and once with an optimistic one, to get a range rather than a single figure.

If the result falls short of your goal, saving more each month or starting a few years earlier usually closes the gap faster than hunting for a higher return. Keeping those savings in a tax-free savings account (TFSA) or an RRSP lets more of that growth stay invested.

Want your savings compounding tax-free?
Farrukh Ahmed, CPA, has served Mississauga since 1995 and handles tax preparation and estate planning. TFSA, RRSP, or corporate investing: let's pick the right account. Responses within 24 hours.
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