Investing

Investment fees calculator

Management fees look small — 1%, 1.5% a year — but they're deducted from your balance every single year, so they compound too: over time, a high fee can take away a huge share of what you'd have built up with a lower one.

Initial capital

Monthly contribution

Years

Expected gross annual return

Your current fund or broker's fee

The TER or ongoing annual charge

Reference (low) fee

For example, a typical index fund

Resets these values back to their defaults.

Total cost in fees

$23,319

At a 1.5% fee over the whole period

$137,666

Final balance with your fee

$172,001

Final balance with the low fee

At a 1.5% fee

$137,666

At a 0.2% fee

$172,001

Paying a 1.5% fee instead of 0.2%, you'd end up with $34,335 less after 25 years, even with an identical gross return.

How the gap widens over time

At a 0.2% fee

At a 1.5% fee

Why a small fee has such a big effect

A 1% annual fee doesn't sound like much next to a 6% return. But that fee isn't charged once — it's charged every year, on an ever-growing balance, just like the returns you earn. Over time, the money that goes to fees also stops earning you anything — you don't just lose the fee itself, you lose everything that fee would have earned had it stayed invested.

How we compare the two fees

We simulate your investment month by month at your current fee, and separately at a lower reference fee, keeping the initial capital, contributions and gross return identical. The only difference between the two simulations is the fee, so the entire gap in the final result is, literally, the cost of paying the higher fee.

TER, management fee, and custody fee

The TER (Total Expense Ratio) is the most complete figure, since it folds the management fee and other fund costs into a single annual percentage. If your broker or fund doesn't give you the TER directly, add the management fee and the custody/deposit fee to approximate it.

What to do with this result

This doesn't mean you should always pick the cheapest option without looking at anything else: an actively managed fund with a higher fee can, in theory, make up for it with better returns, although in practice most don't manage that consistently. What you should do is be aware of what the fee actually costs you in money terms over the long run, not just as a percentage, before deciding whether it's worth it.

Frequently asked questions

Where do I find my fund or ETF's fee (TER)?

It's in the key information document (KID) every fund or ETF must publish, usually labeled "ongoing charges" or "TER". It's also usually listed on the fund's page on your broker's website.

Does this calculator assume the gross return is the same in both cases?

Yes, on purpose: to isolate the effect of the fee, we keep the gross return identical across both simulations. In practice, two different funds can have different gross returns on top of different fees — this calculator only isolates the fee's effect.

Is a 0.2% fee realistic?

Yes — it's a typical level for passively managed index funds and ETFs tracking a broad index. Actively managed funds typically charge between 1% and 2%, sometimes more.

Why isn't the total fee cost simply fee × final balance?

Because the fee is charged each year on that year's balance, not on the final balance. We add up what was actually deducted month by month across the whole period, which is more than a simplified calculation against the end result.

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