Start with S$20,000 and add S$1,000 every month for 20 years, earning 6 percent a year compounded monthly. Each month the balance grows by one twelfth of 6 percent, then the fresh S$1,000 is added. After 240 months the balance reaches about S$528,245.
Over those 20 years you put in S$20,000 at the start plus S$1,000 a month, which is S$240,000 of contributions, so S$260,000 of your own money in total. The remaining S$268,245 is growth earned on the balance. Notice that the interest portion is slightly larger than everything you contributed. That is compounding at work: returns earned in early years themselves earn returns later, so the gap widens the longer you stay invested. Stopping ten years early would cut the final balance far more than ten years of contributions alone would suggest.
Item
Amount
Initial deposit
S$20,000
Monthly contribution (240 months)
S$240,000
Interest earned
S$268,245
Final balance
S$528,245
How it is calculated
The tool compounds month by month. It starts from the initial amount, and for every month it multiplies the running balance by one plus the monthly rate, where the monthly rate is the annual return divided by 12, then adds your monthly contribution. Doing this for the full number of months captures the fact that contributions made earlier compound for longer than later ones. Total contributed is just the initial sum plus each monthly deposit, and interest earned is the final balance minus everything you put in. The return you enter is a nominal annual figure before inflation and any fees, so real spending power will be lower. Investment returns are not guaranteed and Singapore does not tax most personal capital gains.
Frequently asked questions
Why does compounding matter?
Compound interest means you earn returns on your past returns, so growth accelerates over time. Starting early and contributing regularly, even small amounts, usually beats a larger lump sum started later because of the extra years of compounding.
Does Singapore tax investment returns or interest income?
Singapore does not have a capital gains tax, so profits from selling shares, unit trusts, or property are generally not taxable for individuals. Interest earned from most Singapore bank deposits is exempt from personal income tax under IRAS rules. Dividends from Singapore-resident companies are paid under the one-tier system and are tax-exempt in the hands of the shareholder. Foreign-sourced income remitted to Singapore may be taxable in some circumstances, so check the IRAS website if your investments are held overseas.
How does CPF affect my savings growth?
CPF contributions are mandatory for Singapore citizens and permanent residents in employment. As of 2025, the total CPF contribution rate for employees aged 55 and below is 37 percent of ordinary wages, split between employer and employee. CPF Ordinary Account earns a floor rate of 2.5 percent per year, Special and MediSave accounts earn 4 percent, and the Retirement Account earns 4 percent. The first S$60,000 of combined CPF balances earns an extra 1 percent interest. These rates are set by the CPF Board and reviewed periodically. CPF savings are separate from the amounts you enter in this calculator, which is intended for non-CPF savings and investments.
What return rate should I use for Singapore savings and investments?
The Singapore Savings Bonds (SSB) 10-year average yield has ranged from about 2.5 to 3.5 percent in recent years. High-yield savings accounts from local banks such as DBS Multiplier, OCBC 360, and UOB One have offered bonus rates of 3 to 7 percent depending on the conditions you meet. The STI ETF tracking the Straits Times Index has delivered roughly 6 to 8 percent annualised total return over long periods including dividends. For diversified global equity index funds available through Singapore platforms, historical long-run nominal returns have been around 7 to 10 percent. Past returns do not guarantee future performance.