Investment Fee Calculator

The calculator grows the same money twice, month by month, at the return you enter. The first run has no fees at all. The second run takes your fees out along the way. The difference between the two end values is what the fees cost you. It is bigger than the fees you pay, because every amount taken in fees also stops growing. These results are illustrations from a steady return you choose, not predictions or advice.

The formula

monthly growth = (1 + yearly return)^(1 ÷ 12)
fee charged monthly: each month, balance × monthly growth × (1 − total fee % ÷ 12)
fee charged yearly: each year end, balance × (1 − total fee %)
total fee % = yearly fee + platform or advisor fee
fixed fee = one twelfth a month (monthly) or all of it at each year end (yearly)
entry load = % of each amount before it is invested; exit load = % of the final value
fees cost you = end value with no fees − end value with fees
lost growth = fees cost you − total fees paid

Worked example

Start with 10,000, add 500 at the end of every month, assume 7% a year for 20 years and a 1% yearly fee charged monthly. With no fees the starting amount grows to 10,000 × 1.07²⁰ = 38,696.84 and the 240 contributions grow to 253,768.19, so the end value is 292,465.03.

With the fee, each month the balance grows by 1.07^1/12 = 1.0056541 and then loses 1% ÷ 12 = 0.0833%, so it grows by 1.0056541 × 0.9991667 = 1.0048161 a month (about 5.93% a year). After 240 months that factor is 1.0048161²⁴⁰ = 3.1679655. The starting amount grows to 10,000 × 3.1679655 = 31,679.66 and the contributions grow to 500 × (3.1679655 − 1) ÷ 0.0048161 = 225,074.79. The end value is 31,679.66 + 225,074.79 = 256,754.45.

Fees cost you 292,465.03 − 256,754.45 = 35,710.59, which is 12.2% of the no-fee value and 22.0% of the 162,465.03 growth. The fees taken add up to 22,056.42, so the other 13,654.16 is growth those fees would have earned.

Monthly or yearly charging

Many funds work out their fee a little at a time from the balance, so monthly charging is the default here. Some platforms and advisors bill once a year (or each quarter) as a % of your balance. On the example, a 1% fee taken yearly from the year-end balance gives 255,575.14, a little less than the 256,754.45 with monthly charging. A part year at the end pays the same fraction of the yearly fee.

Loads and fixed fees

• Entry load. With a 2% entry load, 2% of the 10,000 and of every 500 is taken before it is invested: 2,600 over 20 years on the example.
• Exit load. A 1% exit load is taken once, from the final value when you cash out.
• Fixed fee. A set charge such as an account fee. 50 a year on the example is 1,000 over 20 years, plus the growth it would have earned.

With all three on top of the 1% fee, the example ends at 247,246.30, which is 45,218.74 less than with no fees.

Comparing options

In Advanced mode you can enter up to three set-ups, for example a fund on its own, the same fund through an advisor, and a different fund. The same return is used for all of them, so the comparison shows only the effect of the fees. A cheaper option is not always the better investment: returns, risk and service differ too.

Related calculators

To see what your money could grow to, or what you need to reach a goal, use the investment calculator. For savings interest at any compounding use the compound interest calculator, and for a one-off sum use the lumpsum calculator.

Assumes the same return every year, contributions at the end of each month or year, and fees taken from the balance as described above. The fees, loads and return are your own inputs; check your fund or platform documents for the charges that apply to you. Results are illustrations only and not investment advice.