📈 Investment Growth

Compound Interest Calculator Canada

See exactly how your money grows over time when returns earn returns — with regular contributions factored in.

How does compound interest work in Canada?

Compound interest means your returns generate their own returns over time. A $10,000 investment at 7% annually doesn't just earn $700 per year — it earns interest on the interest, creating exponential growth. Combined with regular contributions to a TFSA or RRSP, the long-term results can be substantial. This calculator shows your exact future value, total interest earned, and how your balance grows year by year.

Your Numbers
Initial Investment
The amount you're starting with today.
$0
$
Annual Interest Rate
Expected annual return or interest rate.
6%
Years
How long you plan to invest.
10 yrs
Monthly Contribution
Regular monthly deposits added to your investment.
$0
$
Compounding Frequency
Future Value
$0
–
Total Contributed$0
Interest Earned$0
Money Multiplier0×
PrincipalInterest
PrincipalInterest
Balance over time

đŸĻ TFSA vs RRSP

Both accounts let your investments compound tax-free while invested. The difference is when you pay tax — RRSP defers tax to withdrawal, TFSA uses after-tax money but withdrawals are completely tax-free.

📅 Start Early

Thanks to compounding, time in the market matters more than timing the market. Starting 10 years earlier can more than double your final balance — even with smaller contributions.

💡 Compounding Frequency

More frequent compounding (monthly vs annually) slightly increases your effective return. A 6% rate compounded monthly has an effective annual rate of 6.168%.

Frequently asked questions

Compound interest means earning interest on your interest, not just your original deposit. Each time interest is added to your balance, that new larger balance becomes the base for future calculations. Over time this creates an accelerating snowball — the longer you leave it, the faster it grows.

It depends entirely on the rate:

  • 4% annually: $21,911
  • 6% annually: $32,071
  • 8% annually: $46,610
  • 10% annually: $67,275

A few percentage points of difference in return creates a massive difference over 20 years — which is why keeping investment fees low matters enormously.

Divide 72 by your annual interest rate to estimate how many years it takes to double your money:

  • 4%: doubles in ~18 years
  • 6%: doubles in ~12 years
  • 8%: doubles in ~9 years
  • 10%: doubles in ~7.2 years

More frequent compounding produces slightly more interest. On $10,000 at 5% over 10 years:

  • Annually: $16,289
  • Monthly: $16,470
  • Daily: $16,487

The difference is modest for most savings products. The rate and time horizon matter far more than compounding frequency.

Both accounts let your investments compound completely tax-sheltered. Inside a TFSA, you pay no annual tax on interest or gains, so the full amount keeps compounding. Inside an RRSP, growth is tax-deferred until withdrawal. Over 30 years, the difference between taxable and tax-sheltered compounding at the same rate can be worth hundreds of thousands of dollars.