· Updated · Built around the Compound interest calculator
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Compound interest is growth on your growth. In the first years it looks like nothing - the pot is mostly what you put in. Leave it long enough and the growth starts to dwarf your own contributions. That is why the year you start matters more than almost any other number you control.
How compounding works
- Each month, the growth is added to the pot - and next month, that growth earns growth of its own. The compound interest calculator does the sum month by month.
- Time does most of the work. At 10% a year, money roughly doubles every 7 years (the "rule of 72": 72 / 10 = 7.2). Three doublings turn R1 into about R8 in 21 years.
- Inflation works against you the same way. At {{cpi}} a year, prices double in about 16 years - so the chart also shows the result in today's rands, as the inflation calculator would.
Slide it: the early starter and the late starter
Both save the same amount every month until 65. The only difference is when they start.
What the chart shows
- The early starter puts in more, but ends with far more than the extra. Ten more years of R1 000 a month is R120 000 more paid in - the gap at 65 is many times that.
- The late starter would have to save much more each month to catch up. The KPI row shows how much: the savings goal calculator works the same sum for any target and date.
- The growth rate is an assumption, not a promise. A bank deposit pays less (compare with the fixed deposit calculator); a share fund can pay more over decades but falls in some years. The default 10% a year after fees is our assumption, not a sourced statistic.
- Where you hold it changes what you keep. In a tax-free savings account none of the growth is taxed, up to R46 000 a year and R500 000 for life. In a retirement annuity SARS gives you tax back on the way in - the RA or TFSA calculator compares the two. Outside both, interest above the annual exemption is taxed (tax on interest calculator).
Run your own numbers
A lump sum, a monthly saving, or both - and how often the interest is added:
Saving for retirement in particular? The retirement savings calculator adds what you already have and the income it could pay. Our tax-free savings account post runs the same idea inside the R500 000 lifetime limit.
Sources
- The sums: monthly compounding at the yearly growth rate / 12, contributions at the end of each month - the same method as the CalcSA compound interest calculator. The rule of 72 is an approximation of ln(2) / ln(1 + r).
- CPI {{cpi}}: Stats SA consumer price index release, as used across CalcSA (the latest release when this post was last updated).
- TFSA limits R46 000 a year from 1 March 2026 and R500 000 lifetime: SARS - Tax Free Investments.
- Not verified from a primary source: the growth rate - it is a slider assumption, and past returns do not predict future ones.
Calculators used in this post
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