Compound Interest Calculator

Shawn Plummer

CEO, The Annuity Expert

A compound interest calculator is a powerful tool for anyone who wants to save money. This post will teach you how to calculate and use one in order to make your money work better for you. We’ll also explore the benefits of using a compound interest calculator, including the long-term effect it has on your savings account or investment portfolio.

The Power Of Compounding

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Compound Interest Calculator

Compound Interest Calculator
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Compound Interest Formula

Compound interest is the interest you get on your money. When there’s compound interest, it means that the money you earn each year is added to the money you already have. So, instead of just growing, it grows at an increasing rate – this is really helpful for saving for retirement or investing in stocks. Compound interest also accounts for the effects of inflation and repaying a debt.

Triple Compounding: The Power of Tax-Deferral

Here’s how triple compounding works:

  • Earn interest on your principal
  • Earn interest on your interest
  • Earn interest on the money you normally lose to taxes

Certificates of Deposit vs. Fixed Annuity

The Top Fixed Annuities

Fixed annuities offer a guaranteed return for a set amount of years, similar to a CD. Guaranteed crediting rates for the terms below:

  • 2 YEAR TERM: 2.15%
  • 3 YEAR TERM: 2.60%
  • 4 YEAR TERM: 2.75%
  • 5 YEAR TERM: 3.05%
  • 7 YEAR TERM: 3.25%
  • Grow your money as fast as possible
  • Principal protection
  • Interest rate is locked for the term you select
  • Tax deferred growth
  • Withdraw annually without penalty
  • Lump sum death benefits
  • Accepts cash, 401(k), and IRA Funds

What’s The Difference Between a Fixed Annuity and CD?

FeatureFixed AnnuityCD
Who OffersInsurance CompanyBanks
Premium Amounts$2,500 to $1 Million$500 – No Maximum
Terms2 Years to 20 Years3 Months to 7 Years
Guaranteed Interest RatesUp to 3.25%Up to 1.25%
Triple CompoundingYesNo
Principal ProtectionYesYes
Can Lose Money?NoNo
Liquid After Term100%100%
How Are Gains Taxed?Tax-DeferredTaxed Annually
Annual LiquidityUp to 10% AnnuallyNo Liquidity
Who Protects My Money?Insurance Company/SGAFDIC
Accepts IRAYesNo
Accepts 401(k)YesNo
Death BenefitLump-SumLump-Sum

Are Annuities FDIC Insured?

Fixed annuities are not FDIC insured, but they have similar protections for your money. An annuity is an insurance policy guaranteed by the insurance company’s claims-paying ability. The insurance companies are members of the state insurance guarantee associations in each state where they do business. Each state insurance guarantee association protects consumers in the unlikely event that their insurance company fails and defaults on their obligations to their consumers (limits vary per state).

For example, Georgia insures up to $250,000 of the annuity’s cash value per insured life if the insurance company becomes insolvent and can not fulfill its obligations to the insured.

Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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