How is compound interest calculated on savings?

Each period, interest is earned on your balance plus the interest already added. With monthly compounding, future value = starting amount × (1 + r)^n + monthly contribution × ((1 + r)^n − 1) / r, where r is the monthly rate and n is the number of months.

Is interest on Philippine bank deposits taxed?

Yes. Interest income on peso bank deposits is subject to a 20% final withholding tax, deducted by the bank. This calculator can factor that in by reducing the effective rate to 80% of the stated rate.

Compound Interest & Savings Goal Calculator

See how your savings grow over time — or work out how much to set aside each month to reach a goal. Includes the 20% tax on Philippine deposit interest.

Savings & compound interest calculator

What do you want to work out?

Future value

—

Total contributions
Interest earned

Estimate assuming monthly compounding and a constant rate. Real rates change and are not guaranteed. With the tax box ticked, the rate is reduced to 80% to reflect the 20% final withholding tax on Philippine deposit interest.

How compound interest works

Compound interest means you earn interest on your interest. Each month, the rate is applied to your whole balance — including the interest already added — so growth speeds up over time. The longer you stay invested and the more you contribute, the bigger the compounding effect.

The 20% tax on interest

In the Philippines, interest on peso bank deposits is subject to a 20% final withholding tax, which the bank deducts automatically. A "4%" advertised rate therefore nets you about 3.2% after tax. Tick the tax box in the calculator to see the realistic, after-tax result.

Example: ₱5,000/month for 5 years

Starting with ₱10,000 and adding ₱5,000 a month at a 4% rate (before tax) for 5 years, you'd contribute ₱310,000 and end with roughly ₱343,000 — about ₱33,000 of it from interest. A higher rate or a longer horizon grows that gap.

Put your savings where they earn the most — compare the best digital bank interest rates, and budget from your net pay with the Take-Home Pay Calculator.

Last updated: 2026-06-27. Estimates assume monthly compounding and a constant rate; actual returns vary and are not guaranteed. Informational only, not financial advice.