Beginning or end of the month: does deposit timing matter?
Each deposit earns interest only while it is in the account. The compound calculator assumes end-of-month contributions, which differs from depositing before that month’s interest accrues.
Compound interest →Locate the contribution in the calculation
The tool grows the existing balance first and adds the monthly contribution afterward. A contribution made at the end of the final month therefore receives no additional month of growth in that projection. Under a beginning-of-month convention, each contribution participates in one more monthly interest period. This is a timing difference rather than a change to the underlying return assumption.
Compare two monthly deposits
Use a 1% monthly rate, no starting balance and deposits of 100 each month. End-of-month deposits produce 100 after month one and 100 × 1.01 + 100 = 201 after month two. Beginning-of-month deposits produce 101 after month one and (101 + 100) × 1.01 = 203.01 after month two. The 2.01 difference comes entirely from when the contributions enter the balance.
Do not disguise timing as a higher rate
Increasing the rate arbitrarily is not a reliable correction for a different deposit schedule. State the calculator’s timing assumption and use actual transaction dates when precise account reconciliation is required. The example uses a monthly rate, not a 1% annual rate. Real products may accrue interest on daily balances, impose deposit dates or pay interest at different intervals, so their statements can differ from this simplified monthly model.
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