Dividend & compound interest calculator with DRIP and monthly SIP
Three questions, one calculator: what a lump sum becomes, what a monthly contribution becomes, and what reinvested dividends do to both over a couple of decades.
Compounding is not intuitive, and that is the whole problem
People consistently underestimate long-horizon compounding, and they underestimate dividend reinvestment even more, because the growth is not linear and the mental model most of us carry is. The difference between taking dividends as income and reinvesting them over twenty years is not a rounding error — it is often the majority of the final balance.
This calculator makes those curves visible. You set the inputs, and the projection and chart update as you change them, so the effect of one more percentage point or five more years is something you see rather than something you are told.
Three modes in one compound interest calculator
The mode selector at the top changes which inputs appear; the projection and chart below behave the same way in all three.
- Dividend mode with yield growth. Enter an initial principal, a dividend yield and an annual yield-growth rate over a number of years. Modelling yield growth separately matters: a dividend-growth stock and a high-yield stock with a static payout produce very different twenty-year outcomes from the same starting yield.
- SIP mode for monthly contributions. Set a starting balance, a monthly investment, an annual return and a horizon. This is the mode for anyone paying a fixed amount into an index fund each payday, and it answers the practical question — what does £300 a month become by the time the mortgage is finished?
- Plain compound interest. Principal, annual return, years. No contributions, no dividends — for when you want the clean number.
- Inflation-adjusted results. An inflation input converts the projection into today's money. A £900,000 balance in thirty years is a very different proposition at 2% inflation than at 4%, and quoting a nominal figure without this is close to meaningless.
- Saved scenarios and comparison. Name and save a set of assumptions, then open Compare to put two of them on the same chart with their key figures beside each other — conservative against optimistic, or dividends taken as income against dividends reinvested.
- Contribution reminders. Optional local notifications for a saved scenario, if the plan only works when you actually make the transfer.
Where it sits between a spreadsheet and a robo-advisor
A spreadsheet can do all of this, and most people build one, get the compounding formula slightly wrong, and never revisit it. A robo-advisor will show you a projection but only for the products it sells. This sits between the two: the flexibility of your own assumptions, without the arithmetic errors, and with nothing to sell you at the end.
The calculation runs on the device with no market data feed, which means the projection is exactly as good as your assumptions and no better — and it also means no account, no portfolio linking and nothing about your money leaving the phone.
Who uses it
Dividend investors are the obvious audience — the DRIP mode with separate yield growth is not something most free calculators offer, and it is the difference between a realistic projection and a flattering one.
The second group is index-fund contributors: someone setting up a monthly standing order into an ETF who wants to see whether £250 or £400 a month gets them where they need to be, and what the difference costs today. The third is anyone doing back-of-envelope retirement planning who has been quoted a nominal figure and wants to see it in today's money before believing it.
What the projection is and is not
This is arithmetic on assumptions you choose. It does not fetch live prices, dividend histories or fund data, and it does not know about tax, platform fees or fund charges — all of which reduce real returns. Markets do not deliver a constant annual percentage, so treat a projection as a shape, not a prediction. It is not investment advice.
Scenarios are stored locally on the device. The app is free and ad-supported, with an optional purchase to remove ads.
Frequently asked questions
What is DRIP and how is it modelled? DRIP is dividend reinvestment — payouts buy more shares instead of being taken as cash. The app compounds those reinvested dividends, and can grow the yield itself by a set percentage each year.
Can it handle a monthly contribution rather than a lump sum? Yes. SIP mode takes a starting balance plus a monthly investment, an annual return and a horizon in years.
Does it account for inflation? Yes. Enter an inflation rate and the projection is also expressed in today's money — usually the figure worth trusting.
Can I compare two sets of assumptions? Yes. Save each as a named scenario, then open Compare to put both on one chart with their key figures beside each other.
Does it use live market data? No. It works entirely from the assumptions you enter and runs offline on the device.