Contributions are made at the end of each month.
Contributions are made at the end of each month.
How compound growth is worked out
Compound interest means each month's growth is added to your balance, so the next month's growth is worked out on a bigger amount. Over long periods, the growth can end up larger than the money you put in.
- Monthly rate. The yearly return you enter, divided by 12.
- Each month. Your balance grows by the monthly rate, then your contribution is added at the end of the month.
- Yearly increase. If you choose to raise your contribution each year, the new amount applies from the start of each year.
- Today's money. If you enter an inflation rate, the calculator also shows what the final balance would buy in today's rand.
On the Reach a goal tab, the calculator works backwards from your target to find the monthly amount you need to save.
Example: R500 a month for 20 years
Zanele saves R500 a month for 20 years and earns 10% a year. She puts in R120 000 of her own money. Thanks to compounding, her balance reaches about R379 684, which means about R259 684 of it is growth.
On the Reach a goal tab, saving R100 000 in five years at 8%, starting from nothing, takes about R1 361 a month.
Common questions
What return should I use?
Use a rate that fits where the money is invested. Savings accounts and money market funds pay less than share-based investments, which can grow faster over long periods but rise and fall along the way.
Why does starting early matter so much?
The longer your money compounds, the more of the final balance comes from growth instead of contributions. Ten extra years can make a larger difference than a higher monthly amount.
Is my growth taxed?
Interest above the yearly exemption, dividends and capital gains can be taxed. Investing through a tax-free savings account keeps the growth tax-free within the contribution limits.