Investment fee impact calculator
See how an annual fee changes long-term growth.
- Formula and assumptions shown
- Table and CSV export
- Runs in your browser
How it works
The calculator applies the same starting amount, contributions, return, and timing to two projections. The fee scenario reduces the modeled annual return by the entered fee percentage before compounding.
Each month: no-fee balance = prior balance × (1 + annual return ÷ 12) + month-end contribution; fee balance uses (1 + annual return ÷ 12 − annual fee ÷ 12).
This isolates fee drag for comparison. It does not identify a suitable investment, predict returns, or account for every fund expense or tax treatment.
Assumptions
- The gross annual return and fee rate remain constant and are divided by 12 for the monthly model.
- The fee is modeled as a monthly percentage-point drag on the balance, not as a separate cash withdrawal.
- Both scenarios use identical month-end contributions and timing.
- Taxes, volatility, loads, changing fees, and fees beyond the entered percentage are excluded.
Worked example
$10,000 for ten years
With no monthly deposits, a 6% annual return and 0.50% annual fee produce about $18,193.97 without the fee and $17,310.76 with the modeled monthly fee drag, a difference of $883.20.
Step by step
- Split the return and the fee into monthly rates. 6% ÷ 12 = 0.5% a month. 0.50% ÷ 12 = 0.0417% a month, so the fee scenario grows at 0.5% − 0.0417% = 0.4583% a month.
- Grow the balance without the fee. 1.005^120 = 1.8194, so $10,000 grows to $18,193.97 over 120 months.
- Grow the balance with the fee. 1.0045833^120 = 1.7311, so $10,000 grows to $17,310.76.
- Subtract to find the fee drag. The model subtracts the unrounded balances: $18,193.967 − $17,310.764 = $883.20. The drag is about 4.9% of the no-fee balance.
- Check the first month. Month 1 ends at $10,050.00 without the fee and $10,045.83 with it, a drag of $4.17 ($10,000 × 0.000417).
How to read your result
Fee drag is how much lower the balance is at the end of the term with the fee than without it, holding everything else equal. Balance without fee and Balance with fee are the two projections, and Contributions is the total of monthly deposits (the starting balance is not included in it).
The fee drag includes both the fees themselves and the growth those fee dollars would have earned if they had stayed invested. That is why the gap widens faster than the fee rate alone suggests. The chart plots both balances, and the table lists them with the running fee drag for every month.
The fee is modeled as a percentage of the balance taken out of the return each month, which is how a fund expense ratio works. Flat account fees, sales loads, trading costs, advisory fees billed separately, and taxes are not included unless you fold them into the percentage. Returns are held constant, so the drag is an estimate for comparison, not a forecast.
What changes the result most
- Time
- Over 30 years instead of 10, the same 0.50% fee on $10,000 at 6% costs $8,351.87, about 13.9% of the $60,225.75 no-fee balance.
- Fee level
- Over 10 years, a 1% fee costs $1,723.87 and a 0.05% fee costs $90.29, compared with $883.20 at 0.50%.
- Contributions
- Adding $200 a month raises the no-fee balance to $50,969.84 and the fee drag to $1,757.56, because the fee also applies to the money added.
Questions
Is a fee the same as a loss?
A fee is a cost charged under an investment arrangement. The model shows its effect on a chosen return assumption, while actual account results can also move with markets.
Can I compare two different funds?
You can compare fee assumptions, but the tool holds returns and contributions equal. It does not forecast different investments or assess risk.
Does it include taxes?
No. Taxes depend on account type and circumstances and must not be inferred from this projection.
What is an expense ratio?
An expense ratio is a fund’s annual operating expenses expressed as a percentage of its assets. It is deducted from the fund’s assets rather than billed to you, so it shows up as a lower return. Entering an expense ratio as the annual fee on this page models that deduction month by month.
What is a good expense ratio?
There is no official threshold; costs vary by fund type, and funds that track the same index can be compared directly. The dollar effect is what this calculator shows: on $10,000 at 6% over 10 years, a 0.05% ratio costs $90.29, 0.50% costs $883.20, and 1% costs $1,723.87.
More in Savings & investing
Sources
These references explain the concepts behind the calculation. They do not endorse this site. Estimates leave out any cost or condition you did not enter.