Interest Calculator
Calculate simple or compound interest on savings, investments or loans. See the true power of compounding over time.
Interest Calculation Details
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Results — Compound Interest (Monthly)
Total Amount
R 164 530,89
after 5 years
Principal
R 100 000,00
Total Interest Earned
R 64 530,89
Effective Annual Rate (EAR)
10.4713%
The nominal rate of 10% compounded monthly equals 10.4713% effective annual rate
💡 Compounding earns you R 14 530,89 extra
Simple interest on the same principal would return R 150 000,00. Monthly compounding at 10% grows your money to R 164 530,89 — a bonus of R 14 530,89 from reinvesting accumulated interest.
* This is Einstein's "eighth wonder of the world" — interest earning interest. The longer the term and the higher the rate, the more dramatic the gap becomes. At 10% over 20 years, compounding monthly produces 32% more than simple interest on the same deposit.
Growth milestones
- After 1 yearR 110 471,31
- After 2 yearsR 122 039,10
- After 3 yearsR 134 818,18
- After 5 yearsR 164 530,89
Looking for better returns or lower rates?
Interest Rate Cheat Sheet
Key numbers, rules, and formulas every South African saver and borrower should know.
SA Prime Rate (June 2026): 11.25%
The prime lending rate is set by South African banks at Prime = repo rate + 3.5%. The SARB repo rate is currently 7.75%. Home loans are typically prime − 0.5% to prime + 2%. Personal loans are prime + 4% to prime + 10%.
Rule of 72 — How Long to Double Your Money
Divide 72 by your annual interest rate to estimate years to double. At 8% → 9 years. At 10% → 7.2 years. At 12% → 6 years. Works reasonably well up to ~20%. For exact doubling time use: t = ln(2) ÷ (n × ln(1 + r/n)).
Nominal vs Effective Annual Rate (EAR)
A nominal 10% p.a. compounded monthly has an EAR of 10.47%. Compounded daily: 10.52%. The more frequently interest compounds, the higher the effective return. Always compare products using EAR, not nominal rates — especially on savings accounts and credit cards where compounding frequency differs.
TFSA Limits (2026)
R36,000 per tax year, R500,000 lifetime. All growth — interest, dividends, capital gains — is tax-free. Excess contributions are taxed at 40% on the excess amount. A TFSA at 10% over 20 years on the full R500k lifetime limit (invested over ~14 years) grows to over R1.5m tax-free.
NCA Maximum Interest Rates (2026)
Under the National Credit Act, maximum rates are: Mortgage: prime + 5% (16.25%); Credit facilities: prime + 14% (25.25%); Unsecured credit: prime + 21% (32.25%); Short-term credit: 5% per month (60% p.a.). Lenders may not exceed these by law.
Real Return = Nominal Rate − Inflation
If your savings account pays 8% and inflation is 5%, your real return is ~3%. Inflation erodes purchasing power year-on-year. For precise calculation: Real rate = ((1 + nominal) ÷ (1 + inflation)) − 1. At 8% nominal and 5% inflation: real rate = 2.86%, not 3%.
The Cost of Waiting — Monthly Compounding
Starting investing 5 years later at the same rate requires roughly 60–80% more capital to reach the same end value. At 10% monthly compounding: R100k for 20 years = R737k. R100k for 15 years = R448k. You'd need R164k today (64% more) to match the 20-year outcome starting 5 years late.
Simple Interest: When It's Used in SA
Simple interest appears in: bridging finance, some short-term personal loans, fixed-term deposits quoting "per annum simple", and NCA-governed short-term credit (≤6 months). When a lender quotes a monthly rate × months, that's simple interest. Always verify — some products that sound "simple" compound monthly fees.
Simple vs compound interest explained
Simple interest is calculated only on the principal: Interest = P × r × t. It is straightforward and predictable, commonly used in short-term products like some personal loans and bridging finance.
Compound interest is calculated on the principal plus accumulated interest: A = P × (1 + r/n)^(n×t). It grows exponentially. For savings and investments this is beneficial; for loans it means you pay more if interest is capitalised. In South Africa, most credit products use reducing-balance (amortised) repayments, which behaves differently from pure compound interest.
How to Make Compound Interest Work For You
The same compounding that costs you on loans can build wealth on savings. Here's how to maximise it.
Start as Early as Possible
Time is the most powerful variable in compound interest. R100,000 at 10% monthly compounding grows to R672,750 in 20 years but only R271,264 in 10 years. Starting 10 years earlier produces 2.5× the outcome — no additional deposits required. Every year you delay costs you disproportionately more than you lose today.
Reinvest All Interest
Compound interest only works if you never withdraw the interest. Withdrawing annually converts compound growth into simple growth. On a R100,000 investment at 10% over 10 years: leaving interest to compound (monthly) yields R170,070 in interest; withdrawing annually yields only R100,000. The difference is R70,000 from doing nothing extra.
Choose More Frequent Compounding
Monthly compounding always outperforms quarterly, which outperforms annual — at the same nominal rate. At 10% for 10 years on R100k: annual compounding = R259,374; monthly = R270,704; daily = R271,791. The difference widens dramatically at higher rates and longer terms. When comparing savings products, always check the compounding frequency.
Use a Tax-Free Savings Account (TFSA)
South African residents can invest up to R36,000 per year (R500,000 lifetime limit) in a TFSA. All interest, dividends, and capital gains are tax-free. Because tax is not deducted from compound growth, your effective return is significantly higher — especially for investors in the 30–45% income tax bracket. A consistent R36,000/year TFSA from age 25 can compound to millions by retirement.
Beat Inflation with Your Return Rate
SA inflation averages 4–6% p.a. A savings account paying 8% gives you only 2–4% real return. For meaningful wealth building, target investments that return at least CPI + 5%. Unit trusts, ETFs (JSE-listed index funds), and equity portfolios have historically achieved 10–15% p.a. nominal over long periods — compounding at this rate is transformative.
On Loans: Compound Interest Works Against You
Most SA loans use reducing-balance amortisation (not pure compound), but unpaid interest that gets capitalised becomes compound debt. On revolving credit (credit cards, overdrafts), missing payments means paying interest on interest. The NCA maximum rate for unsecured credit is ~29.25% — at daily compounding this is devastating. Pay off revolving debt as aggressively as you save.
Compound Interest Growth Reference Table
What R100,000 grows to at various rates and terms, compounded monthly. Interest earned shown in brackets.
| Annual Rate | 1 Year | 3 Years | 5 Years | 10 Years | 20 Years |
|---|---|---|---|---|---|
| 5% p.a. | R 105 116,19 (+R 5 116,19) | R 116 147,22 (+R 16 147,22) | R 128 335,87 (+R 28 335,87) | R 164 700,95 (+R 64 700,95) | R 271 264,03 (+R 171 264,03) |
| 8% p.a. | R 108 299,95 (+R 8 299,95) | R 127 023,71 (+R 27 023,71) | R 148 984,57 (+R 48 984,57) | R 221 964,02 (+R 121 964,02) | R 492 680,28 (+R 392 680,28) |
| 10% p.a. | R 110 471,31 (+R 10 471,31) | R 134 818,18 (+R 34 818,18) | R 164 530,89 (+R 64 530,89) | R 270 704,15 (+R 170 704,15) | R 732 807,36 (+R 632 807,36) |
| 12% p.a. | R 112 682,50 (+R 12 682,50) | R 143 076,88 (+R 43 076,88) | R 181 669,67 (+R 81 669,67) | R 330 038,69 (+R 230 038,69) | R 1 089 255,37 (+R 989 255,37) |
| 15% p.a. | R 116 075,45 (+R 16 075,45) | R 156 394,38 (+R 56 394,38) | R 210 718,13 (+R 110 718,13) | R 444 021,32 (+R 344 021,32) | R 1 971 549,35 (+R 1 871 549,35) |
| 18% p.a. | R 119 561,82 (+R 19 561,82) | R 170 913,95 (+R 70 913,95) | R 244 321,98 (+R 144 321,98) | R 596 932,29 (+R 496 932,29) | R 3 563 281,56 (+R 3 463 281,56) |
* R100,000 principal, no additional deposits, monthly compounding. Simple interest would yield significantly less, especially at longer terms and higher rates.
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