The Compound interest rate calculator will give you a good guide to the interest you can receive from putting your money to work with the best interest rates for term deposits, all you need to do is enter the amount you wish to save, the amount of interest and the length of time:
The Joys of Compound Interest:
It’s worth looking at the difference between Daily, Monthly, Quarterly, Half Yearly and Annual compound interest.
Here we’ll have a quick look at the sum of $10,000 for 1 year, with an interest rate of 5% (currently wishful thinking for 1 year savings in Australia!):
- Annual interest on $10,000 for 1 year (12 months) at 5%: $500
- Compound interest half yearly (6 months) on $10,000 for 1 year at 5%: $10,506.25
- Compound interest quarterly (3 months) on $10,000 for 1 year at 5%: $10,509.45
- Compound interest monthly (1 month) on $10,000 for 1 year at 5%: $10,511.62
- Compound interest daily on $10,000 for 1 year at 5%: $10,512.67
As you can see if you can find a savings account that compounds interest daily it’s going to help out a bit especially long term, it can almost be like saying you’re earning 5.13% interest instead of the 5% that you’d get if you were only getting Annual interest.
More on Compound interest and savings: Wikipedia
Another helpful Compound Interest Calculator is of course the one from Moneysmart: https://www.moneysmart.gov.au/tools-and-resources/calculators-and-tools/compound-interest-calculator