Growth of a lump sum and regular contributions with compound interest.
Future value
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Total contributed
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Interest earned
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Your breakdown
Updates live as you type
Item
Amount
Worked example
Start with R50,000 and add R2,000 every month for 15 years, earning 9% a year compounded monthly. Each month the balance first grows by one twelfth of 9%, then your R2,000 is added, and the cycle repeats 180 times. Your own money put in totals R50,000 plus R2,000 times 180, which is R410,000. The balance grows to about R954,390, so the interest earned is R954,390 less R410,000, which is R544,390. Interest makes up more than half the final value, and almost none of it comes from the early years. The bulk arrives late, because compounding works on a much larger balance once the contributions have stacked up.
Step
Amount
Opening principal
R50,000
Contributions (R2,000 x 180)
R360,000
Total of your own money
R410,000
Interest earned
R544,390
Future value after 15 years
R954,390
How it is calculated
Compound interest pays a return on your contributions and on the returns already credited, so growth accelerates the longer money stays invested. The calculator steps through the chosen compounding frequency, applying the period rate to the running balance and adding each fresh contribution as it lands. A higher frequency compounds slightly faster than the same annual rate paid once a year, though the gap is small at ordinary rates. The split between contributed money and interest is the clearest signal of how much the time horizon is doing for you. Remember that this is a gross projection: in South Africa, interest above the annual exemption is taxable, so a tax-free vehicle can keep more of the growth shown here.
Frequently asked questions
How does compound interest work?
Compound interest earns interest on both your original money and the interest already added, so growth speeds up over time. This calculator compounds at the frequency you choose and adds your monthly contributions, then shows how much of the final value came from your own money versus interest. Remember that local interest above the annual exemption is taxable.
How much interest income is tax-free in South Africa?
For the 2025/26 tax year, SARS allows individuals under 65 to earn up to R23,800 in interest income before it is taxed. Individuals aged 65 and older receive a higher exemption of R34,500. Interest above these thresholds is added to your taxable income and taxed at your marginal rate.
Does putting money in a tax-free savings account affect compound interest calculations?
A tax-free savings account (TFSA) does not change how compound interest is calculated, but it does mean the full interest amount stays in the account rather than being reduced by tax. The annual contribution limit for a TFSA is R36,000 and the lifetime limit is R500,000 as set by SARS. Growth inside the account, including interest, is fully exempt from income tax, capital gains tax, and dividends tax.
What compounding frequency gives the best result?
More frequent compounding produces a slightly higher future value for the same nominal annual rate. Monthly compounding yields a bit more than quarterly, which yields a bit more than annual. In practice the difference is small at typical South African savings rates, so the compounding frequency offered by your bank or investment provider matters more than chasing a higher frequency elsewhere.