Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
Investment Return Calculator
Ruby Layram
10th Feb 2025
Use our free Investment Portfolio Growth Calculator to estimate how much your portfolio could be worth over a specific time frame. This is based on compounding and how much you plan to invest each month.
It is important to understand that the calculations provided by this tool are not guaranteed. The market fluctuates daily and there is no way of predicting how investments will perform over time.
Investment Returns Calculator
About Our Investment Return Calculator
Investment return calculators can be used to paint a picture of how your portfolio could compound over time. They are often used by investors to provide a rough indication of what they could expect from their portfolio based on how much they invest each month and how long they choose to invest.
If you are investing for your future, investment calculators can help you to understand how long you will have to invest until you reach your goal.
However, the returns that are calculated by these tools are not set in stone. There is always some risk that the value of your investment could go down.
How our calculator works
The returns estimated by our calculator are based on:
- The initial deposit: How much money you plan on investing when you initially open up your investment account.
- Monthly contributions: The amount of money you plan on investing into your account each month.
- Average yearly return: This is the average yearly return that your chosen investment is expected to provide, based on historical performance.
- Compounding: This is the process of reinvesting your returns (dividends, capital gains and interest) to increase the value of your pot.
- Timeframe: The number of years that you plan on investing for.
Our investment return calculator does not take platform fees or tax into account. Therefore, your final returns may be lower than the calculation.
How to Use an Investment Calculator
Investment calculators are useful tools for understanding how long you might need to invest to reach a financial goal. This is particularly helpful if you are planning for retirement or saving to buy your first home.
When you are developing an investment strategy, you might use an investment calculator to determine whether or not you will be able to comfortably meet your goals. If the calculator indicates that you will not be able to reach your goals in your ideal timeframe, you may need to increase your monthly contributions or choose an investment that offers a higher yearly return.
What is a Good Yearly Return?
it may be tempting to pick investments that offer a high yearly return. However, these investments often come with higher risk – this increases your chances of losing the money that you put in!
A high yearly return is considered to be anything above 7% per year. You might consider a low return to be anything below 5% and an average return to be between 5% and 7%.
“Safe” investments such as Gold and Bonds typically offer lower yearly returns but are resilient to changing market conditions. On the other hand, higher-risk investments such as stocks, may offer high returns one year but see losses the next.
When creating your investment strategy, it is important to consider how much risk you can afford to take. Younger investors can typically afford more risk because they have more time to make up for any losses.
It is best practice to diversify your portfolio with both high-return/high-risk and low-return/low-risk investments.
Are you interested in learning more about investing? Why not sign up to the MoneyMagpie bi-weekly Investing Newsletter? It’s free and you can unsubscribe at any time if you find it isn’t for you.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.
Leave a Reply