Compound Interest Calculator (South Africa) ☆ Stoor

Time does more work than the rate

Compounding means your returns start earning returns. Over a few years it is unremarkable; over decades it does something that feels disproportionate — and the dominant variable is time, not the return you assume.

Change only the years in the calculator above and watch the outcome move. A decade you did not use costs more than any fee or rate difference you will ever negotiate, which is why starting small now beats starting properly later.

Then subtract tax — unless you shelter it

A projection assumes the growth is yours. In a normal account it is not entirely:

Inside a tax-free savings account, none of it applies — no interest tax, no dividends tax, no CGT. That is why the TFSA's R46,000 annual and R500,000 lifetime allowance is worth using deliberately: it protects exactly the compounding this calculator is projecting. See the TFSA calculator.

Retirement funds are also untaxed on growth, with a deduction on the way in — see the retirement calculator.

Fees, computed rather than sloganised

Fees matter over long horizons. But the widely repeated claim — that a percentage point of fees costs you about a third of your final pot — overstates the effect by roughly double for a realistic contribution pattern, because it usually assumes a single lump sum invested at the start rather than contributions made over a working life.

That does not make fees unimportant. It means you should compute the difference on your own numbers: run the projection at two fee levels and compare. A real number beats a soundbite, and it will still show you that fees are worth negotiating.

Use it to disprove a scam

This calculator has a second use. Take any promised return and compound it.

A scheme offering "20% a month" turns R10,000 into roughly R89,000 in a year — and about R790,000 in two. If anyone could reliably do that, they would not be recruiting strangers with a small minimum investment.

South Africa has a long history of these — from Ponzi schemes to "forex trading" clubs promising fixed monthly returns. Run the promise through the calculator and believe the arithmetic rather than the person. Watching a pitch become absurd on screen is more persuasive than any warning, and any provider taking deposits or giving advice should be checked against the FSCA register first.

What return is realistic?

• Cash and deposits — modest, and taxable above the exemption. See the savings calculator;
• Diversified equities — historically more over long periods, with real volatility and no guarantee;
• Anything guaranteeing far more, with no risk — is not an investment.

Be conservative and work in real terms where you can: the calculator projects nominal rands, and what matters is what the sum will buy in thirty years.

Frequently asked questions

What rate should I enter?

Something you can defend. For long horizons, use a conservative after-fee figure — and run a second, lower scenario to see how sensitive the result is.

Does this account for inflation?

No — it projects nominal amounts. Either reduce your assumed return to approximate a real return, or interpret the result as "rands", not "buying power".

Monthly contributions or a lump sum?

Both work. Regular contributions suit how income actually arrives, and they remove the pressure of timing the market.

Someone promised me 20% a month.

Put it in the calculator and look at the two-year figure. Then check whether the provider is registered with the FSCA. Guaranteed returns at that level do not exist.

Where does the money actually go?

Emergency fund first, then expensive debt (cards 21%, unsecured 28%), then tax-sheltered long-term investing via a TFSA or retirement fund.

Tax figures are the 2026/27 values. Projections assume constant returns and uninterrupted contributions; real returns vary and are not guaranteed. General information, not investment advice.