Compound Interest Calculator
Free compound interest calculator with monthly contributions, inflation adjustment, and tax-on-interest modelling for savings accounts and fixed deposits in Malta.
Future value
€41,442
Growth over time
| year | Deposits | Interest | Balance |
|---|---|---|---|
| 1 | €2,400 | €337 | €12,737 |
| 2 | €2,400 | €421 | €15,558 |
| 3 | €2,400 | €506 | €18,465 |
| 4 | €2,400 | €595 | €21,460 |
| 5 | €2,400 | €686 | €24,546 |
| 6 | €2,400 | €780 | €27,725 |
| 7 | €2,400 | €877 | €31,002 |
| 8 | €2,400 | €976 | €34,378 |
| 9 | €2,400 | €1,079 | €37,857 |
| 10 | €2,400 | €1,185 | €41,442 |
For estimation purposes only. Actual returns and tax treatment depend on your specific bank, broker, and tax situation — consult a financial advisor.
How Compound Interest Works
Compound interest means you earn interest not only on the money you originally deposit, but also on all the interest that account has already earned. Each time interest is credited, it becomes part of the balance and starts generating its own interest in the following period — which is why savings grow faster the longer they sit, rather than in a straight line.
Take a starting deposit of €10,000 in an account paying 3% a year, compounded monthly, with an extra €200 added every month. In the early months, the interest credited is small next to the amounts being paid in. After several years, though, the balance already contains several rounds of compounded interest, and growth accelerates because the base the interest is calculated on keeps getting larger. The compounding frequency you choose (monthly, annually, and so on) determines how often interest already credited starts earning interest itself — the more frequent the compounding, the further the effective annual rate rises above the stated nominal rate.
How Interest Income Is Taxed in Malta
According to guidance published by the Malta Tax and Customs Administration (MTCA) — the authority that succeeded the Office of the Commissioner for Revenue (CFR) as Malta's tax administration — banks may apply a Final Withholding Tax (FWT) of 15% to interest paid to individuals on local bank deposits. Where FWT is applied, the bank deducts it directly at source, the tax is final, and no further income tax is due on that interest.
Crucially, this is an election, not the only option available. A saver can instead ask the bank to pay interest gross, without the 15% deduction — but must then declare that interest in their annual tax return, where it is taxed together with other income at Malta's normal progressive rates. For most savers with modest bank balances, taking the flat 15% FWT works out cheaper than declaring interest at the marginal rate, which is why it is the commonly used default; but the comparison depends on your total income and should be checked against your own tax bracket. Rates and thresholds are set by MTCA and should always be confirmed against current guidance before you rely on them for a tax return.
Savings Accounts vs Fixed-Term Deposits in Malta
A standard savings account with a Maltese bank gives you access to your money at any time, usually with a variable interest rate that moves with the bank's own pricing and the wider interest-rate environment — indicatively in the region of 2–3% a year, though this varies by institution and should be checked directly with your bank. A fixed-term deposit locks your capital away for an agreed term, from a few months to several years, in exchange for a typically somewhat higher, guaranteed rate for that term — indicatively around 2.5–3.5% — but withdrawing early usually means a penalty or is not possible at all.
Both products are taxed identically under the FWT regime described above: the bank deducts 15% at source unless you elect to receive interest gross and declare it yourself. Malta's membership of the euro since 2008 means these products are priced in euro and sit within the same monetary environment as other Eurozone savers, without the currency-conversion step that non-euro EU savers have to think about.
Example: €10,000 plus €200 a month at 3% over 10 years
Starting from an initial deposit of €10,000, adding €200 every month, at a nominal interest rate of 3% a year compounded monthly, this calculator gives a future value of €41,442 after 10 years. Of that, €34,000 comes from money paid in (the €10,000 starting deposit plus €24,000 contributed over the ten years) and €7,442 is interest earned. Because of the monthly compounding, the effective annual rate works out at 3.04% — slightly above the stated nominal rate of 3%. At this rate, a lump sum left untouched with no further contributions would take about 23.1 years to double.
Example: the same €10,000 with no monthly contributions
If you invested the same €10,000 at 3% compounded monthly but made no further contributions, the balance after 10 years would reach €13,494 — of which €3,494 is interest. Compared with the €41,442 result above, this shows how much of the higher figure actually comes from the ongoing monthly contributions rather than the starting deposit alone: over the same period and rate, regular saving makes the larger difference.
Malta has used the euro since 2008, so this calculator's euro figures translate directly without any currency conversion — a detail that matters less for a Eurozone saver than for savers in nearby non-euro markets. The 15% Final Withholding Tax on bank interest is an election rather than a fixed rule, so it is worth checking against your own income position before assuming it is automatically the cheaper route.
