Compounding calculator
What does a monthly return compound to — and is the one you were promised even possible?
Compounding is powerful, and it is also the favourite tool of people selling signals, “account management” and bonuses. Project your own plan here, then type in the monthly return somebody promised you and see what it implies over a year and a decade.
Your plan, month by month
| Month | Balance | Multiple |
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Next See what a drawdown does to that plan →
Reading the number honestly
- For scale: broad stock markets have returned roughly 7–10% a year over long periods, and the best-known investors in history sit around 20% a year across decades. Anything quoted per month belongs next to those numbers.
- Ten per cent a month is 214% a year. $1,000 would pass $90,000 in four years and $9 million in eight. Nobody who could do that would need your deposit.
- Compounding cuts both ways. It compounds drawdowns and fees too. The projection assumes every month is the same, which is not how trading works.
- This is a sanity check, not a forecast. Most retail accounts lose money; brokers' own disclosures put it at 70–89%.
Questions
What monthly return is realistic?
There is no safe number, but there is a ceiling of plausibility. Sustained returns above 2–3% a month put you ahead of almost every professional fund in history. Anyone promising more, for a fee or a deposit, is selling something other than returns.
Why does a promised return matter if I am not paying for it?
Because the promise is how the money is taken: a “free” signal group that needs you to deposit with a specific broker link, a copy-trader whose drawdown is hidden, a bonus that requires turnover. Converting the monthly figure to an annual one is the fastest way to see the claim for what it is.
Does withdrawing profit stop compounding?
Yes, by design — and for many traders that is the right choice. Taking profit out at a set level protects what you have made from the drawdown that compounding would otherwise magnify.
