Savings Calculator
See how compound interest grows your money over time. Every country has a different tax-advantaged savings wrapper — the account type matters as much as the rate.
Quick Answer
Starting with $10,000 and adding $500/month at 4.8% APY for 10 years, you'd accumulate approximately $89,000 — of which $23,000 is interest earned through compounding.
Tax-Advantaged Savings Accounts Around the World
The biggest driver of long-term savings returns isn't always the interest rate — it's whether your growth is taxed. Here's how major countries structure their tax-free savings wrappers:
| Country | Account Type | 2024 Annual Limit | Tax Benefit |
|---|---|---|---|
| 🇺🇸 US | HYSA (taxable) | No limit | Interest taxed as income |
| 🇺🇸 US | Roth IRA | $7,000 ($8,000 50+) | Tax-free growth & withdrawals |
| 🇬🇧 UK | Cash ISA | £20,000 | Completely tax-free |
| 🇨🇦 Canada | TFSA | $7,000 | Tax-free growth & withdrawals |
| 🇦🇺 Australia | Regular savings | No limit | Interest taxed at marginal rate |
| 🇩🇪 Germany | Tagesgeldkonto | €801 allowance | €801 interest-free per year |
APY vs AER — Same Thing, Different Names
When comparing savings rates internationally, you may encounter different terminology for the same concept:
- APY (Annual Percentage Yield) — US term. Includes compounding effect.
- AER (Annual Equivalent Rate) — UK term. Same calculation as APY.
- EAR (Effective Annual Rate) — European/general term. Same concept again.
- p.a. (per annum) — may mean simple annual rate without compounding — always check the compounding frequency.
Frequently Asked Questions
Is monthly or daily compounding better?
More frequent compounding produces slightly higher returns. Daily compounding is marginally better than monthly, which is better than annual. The difference is small — on $10,000 at 5% for 10 years, daily compounding yields ~$64,870 vs. annual compounding's $62,889. The rate difference matters far more than compounding frequency for short-to-medium time horizons.
Can I use a UK Cash ISA if I move abroad?
You can keep an existing Cash ISA if you move abroad, but you cannot make new contributions while non-UK resident. The tax-free status continues for existing balances. Similar restrictions apply to Canadian TFSAs for non-residents (a 1% monthly penalty tax applies to contributions made while non-resident).