Monthly deposits: beginning or end of month?
Keep the same deposits and rate, change only the timing, and see why two compound-interest calculators disagree.
The short answer
In a constant monthly model, a beginning-of-month deposit earns one extra month of interest compared with the same deposit at month-end. The contribution portion of future value is therefore multiplied by 1 + the monthly rate. The opening balance is unchanged because it was already invested at the start.
Put the cash flows on a timeline
For 12 end-of-month deposits, the first arrives at month 1 and the last at month 12, when the final balance is measured. The last deposit earns no interest before that measurement. For 12 beginning-of-month deposits, the first arrives at month 0 and the last at month 11. Each deposit is shifted one month earlier.
These are the ordinary-annuity and annuity-due timing conventions. “Monthly” alone does not choose between them. When a calculator returns a different balance, inspect the timing before changing the assumed interest rate or deciding that the arithmetic is wrong.
A one-year example with no opening balance
Assume 100 deposited each month for 12 months, a 6% nominal annual rate compounded monthly, no opening balance, and no withdrawals, fees or taxes. The monthly rate is 0.06 ÷ 12 = 0.005. End-of-month deposits grow to about 1,233.56; beginning-of-month deposits grow to about 1,239.72.
Total deposits are 1,200 in both cases. The approximate 6.17 difference before separately rounding balances is the result of timing. It is not an extra contribution or a different annual rate. Display rounding may make the subtraction of the two rounded balances differ by one cent from the rounded unrounded difference.
End deposits: C × ((1 + i)^n − 1) / i
Beginning deposits: C × ((1 + i)^n − 1) / i × (1 + i)| Timing | Total deposited | Final balance | Interest |
|---|---|---|---|
| End of month | 1,200.00 | 1,233.56 | 33.56 |
| Beginning of month | 1,200.00 | 1,239.72 | 39.72 |
Do not multiply the opening balance twice
If an opening principal P is present, its future value is P × (1 + i)^n under either convention. Only the recurring-deposit component receives the extra (1 + i) multiplier when changing from end to beginning. Multiplying the whole balance shifts the opening principal too, adding growth that does not belong to this comparison.
At a zero interest rate, the division-based annuity formula needs its limit: future contributions equal C × n. Beginning and end timing then give the same result. A negative rate reverses the familiar advantage of earlier deposits in this simplified model; do not generalize the positive-rate example to every scenario.
How to reproduce a comparison
Keep opening amount, nominal rate or APY basis, term, frequency and contribution amount identical. Then change only the contribution timing. CalcMyCompound’s editable comparison makes that assumption visible. If starting from APY, convert to the monthly rate instead of dividing APY by 12.
An actual bank account can accrue interest daily, credit it on different dates, and accept deposits mid-month. Those details require the account’s rules and actual transaction dates. A constant monthly scenario is useful for understanding the timing effect, not for certifying what a bank owes you.
Sources and scope
An educational scenario with equal monthly periods and constant rates. No investment product, return prediction or account-specific interest entitlement is implied. Examples use unspecified monetary units.
Sources checked October 30, 2026. Worked examples are our educational calculations, not observations about people or product offers.
- OpenStax Principles of Finance 2e: Timing of Cash Flows
Ordinary-annuity and annuity-due future-value conventions; worked examples here are independently calculated.
Publisher responsible for this guide: Kymata Labs LLC. To report a correction: Contact us.