NZ Compound Interest Calculator 2026

The more often interest is credited, the more you earn, because each payment starts earning interest itself. On $10,000 at 5% for a year, annual compounding gives $500 while monthly gives about $511.62. The gap widens sharply over longer periods.

Yes. Interest is taxable income and banks deduct Resident Withholding Tax before paying it. This calculator projects gross returns, so your actual balance will be lower once RWT is taken. Give your bank your IRD number and choose the RWT rate matching your income, or tax is deducted at a higher default rate — check current rates with Inland Revenue.

If you enter a nominal return, the final figure is in future dollars and overstates what it will buy. Subtracting expected inflation from your return first gives a result in today's purchasing power, which is usually the more meaningful number for long-term planning.

No. Fund management fees, platform charges and transaction costs are not deducted, and they compound against you exactly as returns compound for you. A 1% annual fee can consume a substantial share of a multi-decade balance.

A single average rate keeps the arithmetic transparent, but real returns vary year to year and can be negative. Treat the output as one scenario rather than a forecast, and test a lower rate to see how sensitive your plan is.