Growth can earn growth
With compounding, growth stays in the balance used to calculate later growth. At a fixed 10% effective annual rate, R1 000 becomes R1 100 after one year and R1 210 after two years if nothing is withdrawn. This is an illustration, not a product return.
Contributions matter too. R500 added each month contributes R6 000 a year regardless of market performance. Separating contributions from growth helps you see where the projected balance comes from.
Compare consistent rate assumptions
A nominal rate with monthly compounding differs from an effective annual rate. The calculator takes a nominal annual assumption and converts the selected compounding pattern into equivalent monthly growth.
Beginning-of-month contributions get one more month of growth than end-of-month contributions. When growth is negative, earlier contributions are exposed to that loss for longer.
Think in purchasing power
Inflation reduces what a future rand can buy. A projection of R110 000 in a year with 10% inflation has the same modelled purchasing power as R100 000 today. Use the inflation option to view an illustrative today’s-money balance.
Real products also have taxes, fees, changing rates and investment risk. Revisit assumptions periodically and avoid treating a smooth projection as a promise.
Use contributions as a control calculation
With no starting balance, R500 contributed at the end of every month for 24 months totals R12 000 at zero growth. That is a useful control: a zero-return projection without fees or withdrawals should reconcile to the money added. It also shows how much of another scenario's balance comes from saving rather than assumed growth.
Now change only the return assumption and compare the growth component. If you also change timing, annual contribution increases and compounding frequency, you will no longer know which change explains the difference. Keep those variations as separate, labelled scenarios.
Match the horizon to the question
A long-term projection can make small differences look large because the assumptions repeat for many periods. A constant positive return does not represent the path of a volatile investment. A short-term cash target and a long-term investment question can need different assumptions, access arrangements and risk considerations.
Review the contribution and the time frame separately when circumstances change. Download the assumptions with a result so it is not later mistaken for a forecast. For a fixed target, the savings-goal calculator can work backwards to an illustrative monthly contribution rather than assuming a chosen deposit will be enough.
Educational information, not personalised financial advice. This guide was prepared for this release. Read our editorial and corrections policy.