Compound Interest Calculator
Compare how your money grows across Australian tax wrappers. An offset account, superannuation, and a savings account all compound differently once tax is applied. Enter your details to see the after-tax outcome side by side.
Investment Details
Best outcome
Offset Account
$301,888
after 20 years at 7%
+$74,878 vs Savings Account
Growth Over Time
Offset Account
Interest saved on your mortgage — effectively tax-free returns at your mortgage rate
After-tax value
$301,888
Contributions
$130,000
Growth
$171,888
Tax paid
$0
Superannuation
Concessional contributions taxed at 15%, earnings taxed at 15%, tax-free after 60
After-tax value
$264,363
Contributions
$130,000
Growth
$134,363
Tax paid
$23,711
-$37,525 vs Offset Account
Savings Account
Interest taxed at your marginal rate each year
After-tax value
$227,010
Contributions
$130,000
Growth
$97,010
Tax paid
$46,708
-$74,878 vs Offset Account
Year-by-year breakdown
| Year | Offset Account | Superannuation | Savings Account | Contributions |
|---|---|---|---|---|
| 1 | $17,120 | $16,952 | $16,756 | $16,000 |
| 2 | $24,738 | $24,318 | $23,831 | $22,000 |
| 3 | $32,890 | $32,122 | $31,241 | $28,000 |
| 4 | $41,612 | $40,390 | $39,000 | $34,000 |
| 5 | $50,945 | $49,150 | $47,127 | $40,000 |
| 6 | $60,931 | $58,431 | $55,637 | $46,000 |
| 7 | $71,617 | $68,265 | $64,549 | $52,000 |
| 8 | $83,050 | $78,684 | $73,883 | $58,000 |
| 9 | $95,283 | $89,723 | $83,657 | $64,000 |
| 10 | $108,373 | $101,418 | $93,893 | $70,000 |
| 11 | $122,379 | $113,809 | $104,613 | $76,000 |
| 12 | $137,366 | $126,938 | $115,840 | $82,000 |
| 13 | $153,401 | $140,848 | $127,597 | $88,000 |
| 14 | $170,559 | $155,585 | $139,909 | $94,000 |
| 15 | $188,919 | $171,200 | $152,803 | $100,000 |
| 16 | $208,563 | $187,743 | $166,307 | $106,000 |
| 17 | $229,582 | $205,271 | $180,448 | $112,000 |
| 18 | $252,073 | $223,841 | $195,258 | $118,000 |
| 19 | $276,138 | $243,517 | $210,768 | $124,000 |
| 20 | $301,888 | $264,363 | $227,010 | $130,000 |
Frequently asked questions
How does an offset account save you tax on interest?
An offset account reduces the interest charged on your mortgage by the balance held in the account. Since you're avoiding interest rather than earning it, there's no taxable income — making it effectively a tax-free return at your mortgage rate.
How is superannuation taxed differently from a savings account?
Super contributions are taxed at 15% (concessional) and earnings within super are taxed at 15%, compared to your marginal rate on a savings account. After age 60, withdrawals from super are tax-free, making it one of the most tax-effective long-term investment vehicles.
What marginal tax rate should I use?
Use the rate that applies to your top dollar of income. For example, if your taxable income is $100,000, your marginal rate is 32.5% (plus 2% Medicare levy). The calculator uses the rate you enter to tax savings account interest each year.
Why does the offset account often come out ahead?
Offset accounts provide a tax-free effective return (since you avoid interest rather than earn it). At a mortgage rate of 6%, the offset gives you an effective 6% after-tax return, while a savings account earning 5% might only net 3.4% after tax at a 32.5% marginal rate.
Can I access super before retirement?
Generally, super is preserved until you reach your preservation age (60 for most people) and retire. Early access is only available in limited circumstances such as severe financial hardship or terminal illness. The offset account and savings account are fully accessible at any time.
Does this calculator include the super contributions tax?
This calculator focuses on the growth phase — how earnings are taxed within each wrapper. It does not model the 15% contributions tax on concessional super contributions or the super guarantee. It compares like-for-like growth on the same initial and monthly amounts.
What annual return rate should I assume?
A common long-term assumption is 7% for a diversified portfolio (before inflation). For an offset account, use your mortgage interest rate (e.g. 6%). For a savings account, use the current high-interest savings rate (e.g. 5%). Adjust the rate to match your scenario.
How accurate is this comparison?
This calculator provides a simplified comparison using flat annual return rates and current tax rules. It does not account for contribution caps, changing tax brackets, inflation, or fees. Use it as a starting point to understand the structural tax differences between wrappers.
Tax Accuracy & Sources
This calculator uses simplified flat annual returns and current tax rules. It does not model contribution caps, super guarantee, changing tax brackets, inflation, or fund fees.