Compound
Interest

Ränta på ränta (compound interest) means your returns are reinvested and generate their own returns. Instead of earning a fixed amount each year, your earnings accelerate over time as your capital base grows.

For example, saving 5,000 kr/month at 7% annual return for 20 years means you contribute 1.2 Mkr – but end up with roughly 2.6 Mkr. The extra 1.4 Mkr is compound growth. The longer the time horizon, the more powerful the effect becomes.

ISK (investeringssparkonto) is taxed annually via schablonbeskattning – roughly 1.07% per year on values above 300 000 kr (2026). You never pay tax on individual trades, making it simple and predictable.

Depåkonto (aktie- & fondkonto) uses kapitalvinstskatt – 30% tax only when you sell at a profit. No tax during accumulation, but tax hits hard at withdrawal. Can be better for very low returns or short holding periods.

For most long-term savers, ISK wins when expected returns exceed about 3.5%. See the ISK vs Pension comparison for a detailed side-by-side projection.

From 2026, the first 300 000 kr of your ISK's average value is exempt from schablonskatt. The tax only applies to the portion above this threshold.

The average value is calculated as (start-of-year value + end-of-year value) / 2. This means a small ISK with under 300 000 kr pays zero tax – making ISK even more attractive for beginning savers.

For larger portfolios, the effective tax rate gradually approaches the full ~1.07% as the 300k exemption becomes a smaller share of total value.

A common guideline is to save 10% to 20% of your net income, that is a savings rate of 10 to 20%. On a typical Swedish salary of 50 000 kr gross (approximately 39 000 kr net), that means between 3 900 and 7 800 kr per month.

The 50/30/20 budget framework suggests allocating 20% of net income to savings and debt repayment. If you already have an emergency buffer and no high-interest debt, the full 20% can go toward long-term investments.

The most important factor is consistency. Saving 3 000 kr per month for 30 years at 7% return produces roughly 3.5 Mkr. Doubling to 6 000 kr doubles the result. Starting early matters more than the exact amount because compound interest needs time to work.

If you have an ambitious savings target, the FIRE calculator can show exactly when your investments will cover your living expenses.

The rule of 72 is a mental shortcut for estimating how long it takes your money to double. Divide 72 by your annual return percentage and you get the approximate number of years.

At 7% return, your money doubles in about 10 years. At 4%, it takes 18 years. At 10%, roughly 7 years. The formula works surprisingly well for returns between 2% and 15%.

This makes it easy to think in doublings. If you invest 100 000 kr at 7%, you have 200 000 in 10 years, 400 000 in 20, and 800 000 in 30. Each doubling adds more in absolute terms than all the previous ones combined.

Fund fees compound against you just as returns compound for you. A seemingly small difference in annual fees can cost hundreds of thousands of kronor over a long savings period.

Example: saving 5 000 kr per month for 30 years at 7% gross return. With a 0.2% fee (typical index fund), you end up with roughly 5.7 Mkr. With a 1.5% fee (typical actively managed fund), the result drops to about 4.5 Mkr. The 1.3 percentage point fee difference costs you approximately 1.2 Mkr.

That 1.2 Mkr never appears on any statement. It simply grows slower. The fund fee calculator shows the exact impact for your situation. As a rule of thumb, keep total fees under 0.3% for passive equity funds.

Historical returns for Swedish equities (SIXRX index, 1970 to 2025) have averaged roughly 10% to 11% per year nominally. After adjusting for inflation, the real return has been approximately 6% to 7%.

However, returns are not smooth. Individual years range from +50% to −40%. Over 10-year rolling periods, the worst real return was roughly 0% and the best exceeded 15% per year. The longer you stay invested, the more your actual return converges toward the long-term average.

A common planning assumption is 7% nominal (before inflation) or 5% real (after inflation). The calculator uses nominal returns by default. Enable the inflation setting to see values in today's purchasing power.

To explore historical scenarios, the backtest tool lets you pick any starting year from 1970 and see exactly what would have happened.

For money you might need within one to two years, a regular savings account (sparkonto) is usually the better choice. There is no market risk, the balance is guaranteed, and you can withdraw instantly. The interest rate is typically 2% to 4% and is taxed as capital income at 30%.

For everything with a longer time horizon, ISK with broad equity funds is generally superior. Even accounting for the schablonskatt (~1.07% per year on values above 300 000 kr), equities have historically outperformed savings accounts by a wide margin over any 10+ year period.

A practical rule: keep 3 to 6 months of living expenses in a savings account as an emergency buffer. Anything beyond that, invest in an ISK. If your ISK balance stays under 300 000 kr, you pay no schablonskatt at all, making it essentially a tax-free investment account for smaller portfolios.

ISK (investeringssparkonto) is not taxed on your gains directly. Instead it applies a flat yearly charge, the schablonskatt, on the account value. The calculation runs in four steps for 2026.

Step 1: Find the average capital base, taken as the value at the start of each quarter plus deposits, roughly the year's average balance. Step 2: Subtract the tax-free free amount. The first 300 000 kr of that base is exempt, so only the portion above it is taxed. Step 3: Multiply the taxable base by the schablon rate of 3.55% (the government borrowing rate plus one point) to get the schablon income. Step 4: Tax that schablon income at the 30% capital tax rate.

Combining steps 3 and 4 gives the effective drag: 3.55% times 30% equals 1.065% per year on the value above the free amount. On a 500,000 kr account, only 200,000 kr is taxed, so the charge is about 2,130 kr, an effective rate of well under 1.07% on the full balance. The larger the account, the closer the effective rate creeps toward the full 1.07%. The ISK vs pension comparison shows how this drag stacks up against other account types over time.