What is the difference between compound interest and simple interest?
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With simple interest, you earn a fixed return on your original principal only. If you deposit €1 000 at 5 % simple interest, you earn €50 per year — always on the original €1 000. With compound interest, the interest you earn is added to your principal, so the following period's interest is calculated on a larger amount. After year one you earn €50, but in year two you earn 5 % on €1 050 = €52.50, and so on. Over decades this snowball effect creates a massive difference in outcome.
How does compounding frequency affect my savings?
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The more frequently interest is compounded, the more you earn. Consider €10 000 at 6 % for 10 years: annual compounding yields approximately €17 908, monthly compounding yields about €18 194, and daily compounding yields roughly €18 220. The gains from moving from annual to monthly compounding are meaningful; from monthly to daily the difference is modest. Most high-yield savings accounts and Finnish PS accounts compound monthly or daily.
What is a realistic interest rate to use in this calculator?
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It depends entirely on the savings vehicle. In 2024–2025, European high-yield savings accounts offered roughly 2–4 % nominal annual interest. Finnish government bonds yield around 3–4 %. Globally diversified equity index funds have historically delivered approximately 7–10 % nominal annual returns (before inflation) over multi-decade periods, though past returns do not guarantee future performance. For conservative, low-risk projections, use 2–3 %. For a balanced long-term portfolio, 5–7 % is commonly cited as a reasonable planning estimate. Anything above 8–9 % should be treated with caution unless backed by a specific investment thesis.
Does this calculator account for inflation?
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No — the calculator shows nominal (not inflation-adjusted) values. To estimate real purchasing power, subtract the expected annual inflation rate from your interest rate. If you expect 6 % nominal returns and 2.5 % inflation, use a real return of roughly 3.5 % in the calculator. The results then represent today's purchasing power rather than future nominal euros. Finland's long-term average CPI inflation has been approximately 1.5–2.5 %, though it spiked significantly in 2022–2023.
Kuinka paljon minun täytyy säästää joka kuukausi? (Finnish)
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Se riippuu tavoitteestasi, aikataulustasi ja odotetusta tuotostasi. Yleinen nyrkkisääntö on säästää vähintään 10–20 % kuukausituloistasi. Jos tavoitteesi on esimerkiksi 100 000 euroa 20 vuodessa 5 %:n vuosikorolla, tarvitset noin 243 €/kk lähtöpääoman lisäksi. Käytä tätä laskuria eri skenaarioiden kokeilemiseen — muuta kuukausisäästöä, korkoa ja aikajaksoa, jotta löydät sinulle sopivan yhdistelmän. Pienetkin säännölliset talletukset kasvavat ajan myötä merkittäväksi pääomaksi korkoa korolle -periaatteen ansiosta.
Как рассчитываются сложные проценты ежемесячно? (Russian)
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При ежемесячном начислении годовая ставка делится на 12, чтобы получить месячную ставку rм = r / 12. Каждый месяц к вашему балансу прибавляются проценты: новый баланс = старый баланс × (1 + rм) + ежемесячный взнос. Этот процесс повторяется 12 раз в год в течение всего срока вклада. Благодаря тому что проценты начисляются на уже накопленные проценты, итоговая сумма значительно превышает то, что дало бы простое начисление. Именно поэтому важно не снимать средства досрочно: каждое снятие «сбрасывает» базу для начисления.