Compound interest: how your savings can grow
With compound interest, the interest you earn earns interest in turn. Here is what makes the result vary.
Updated on October 30, 2026 · 1 min read
The idea
Interest earned is added to your balance, then earns interest too. The longer the money stays invested, the bigger this effect becomes.
Compound interestSee how a starting amount and regular contributions could grow over time.Open the calculatorWhat makes the result vary
- Time: the longer the money stays invested, the bigger the effect.
- The amount and regularity of contributions.
- The rate of return.
- Compounding frequency: at the same rate, interest compounded more often makes the balance grow a little faster.
- Fees, which reduce the net return.
- Tax: it depends on the account used (TFSA, RRSP or non-registered account).
A return is never guaranteed
A savings account or a guaranteed investment certificate (GIC) generally offers a rate known in advance. Stock market investments can earn more, but their value moves and can go down.
A simulation uses a hypothetical rate: it is an illustration, not a forecast. Our calculator shows three scenarios so you can see the effect of a lower or higher rate.
What about registered accounts?
In a TFSA, growth is generally tax-free. In an RRSP, it is sheltered from tax until withdrawal. See TFSA, RRSP or FHSA: what are the differences?
Related guides
Official sources
Educational estimate — not advice.