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Savings account or investing?

See what the same money becomes in a savings account and in an index fund, year by year — and how your plan would have fared through every boom and crash of the S&P 500, MSCI World and STOXX Europe 600.

Your plan

Your money

• Starting amount
• Every month
• For how long — Money you need within about five years is usually better off in savings.

Savings account

• Interest per year — What an easy-access savings account pays today. The bank can change it at any time; the calculator keeps it the same.

Index fund

• The fund follows
• Return per year, before costs — History is no promise. Try a more cautious figure as well.
• Costs per year — Fund and broker together. An index ETF costs about 0.1–0.3% a year, an actively managed fund often 1–2%.

Inflation

• Inflation per year — For the amounts in today's money.

Tax

• Tax on interest
• Tax on investment gains — Charged once, when you sell: the calculator assumes a fund that reinvests its dividends.

What the indices returned

Average return a year, compounded, with dividends reinvested, before costs and tax. Tap a figure to use it in the calculator.

• S&P 500 (USD, since 1928): 10 yrs 14.7% · 20 yrs 10.9% · 30 yrs 10.3% · 50 yrs 11.9% · All years 10.0%
• MSCI World (USD, since 1970): 10 yrs 12.7% · 20 yrs 9.1% · 30 yrs 8.6% · 50 yrs 10.9% · All years 10.1%
• STOXX Europe 600 (EUR, since 1992): 10 yrs 7.7% · 20 yrs 6.2% · 30 yrs 7.6% · 50 yrs — · All years 8.3%

Through 2025. S&P 500 and Treasury bills: A. Damodaran, NYU Stern. MSCI World: MSCI, gross return in US dollars. STOXX Europe 600: STOXX, net return in euros.

A fair comparison, month by month

Two pots get exactly the same money: your starting amount today and the same amount at the end of every month. One is a savings account at the interest rate you enter. The other is an index fund that earns the return you enter, less the yearly costs of the fund and your broker. Each month both grow first; then the month's money goes in.

Tax follows the rules of the country you choose. In the Netherlands box 3 taxes both pots every year, on a deemed return that is higher for investments than for savings. Elsewhere interest is taxed in the year you receive it and investment gains once, when you sell. Every amount on this page is what you would have after cashing in.

History shows what the average hides. The calculator runs your plan through every period of the same length in the index data — starting just before the 1929 crash, in the 1973 oil crisis, at the dot-com peak of 2000 — with the real return of each year. The shaded band runs from the worst to the best of them; the History view counts in how many of those periods investing beat the savings account, for every holding period from one year up.

The indices: the S&P 500 (500 large US companies, data from 1928), the MSCI World (the developed world, from 1970) and the STOXX Europe 600 (Europe, from 1992). The returns are total returns: dividends reinvested, in the index's own currency, before costs and tax.

What decades of research say

The history above is the experience of a few markets; research across countries and centuries puts it in context — the strongest findings, and the warnings.

1. Over the long run, shares have beaten savings

   Across 16 rich countries from 1870 to 2015, shares returned about 7% a year after inflation and safe short-term savings about 1% (Jordà et al., 2019). In the United States the gap from 1889 to 1978 was almost the same — 7.0% against 0.8% — so large that economists named it the equity premium puzzle (Mehra & Prescott, 1985).

2. Time lowers the odds of losing, not the risk

   In the data on this page the S&P 500 beat US Treasury bills in two years out of three, and in every 20-year period since 1928. Across 39 developed countries since 1841, though, a 30-year investor still had a 12% chance of ending below inflation — US data alone suggests about 1% (Anarkulova, Cederburg & O'Doherty, 2022). And the longer you invest, the larger a shortfall can be when it does happen (Bodie, 1995).

3. Spread your money over the whole market

   Most individual US shares did worse than Treasury bills over their lifetime; about 4% of companies account for the entire net gain of the stock market since 1926 (Bessembinder, 2018). An index fund holds those few winners automatically — picking a handful of shares mostly means missing them.

4. Costs compound too

   Before costs, the average actively managed dollar earns the market return; after costs it must earn less (Sharpe, 1991). US investors gave up about 0.67 percentage points a year from 1980 to 2006 by trying to beat the market (French, 2008), and last year's winning funds rarely repeat it (Carhart, 1997). Over decades, a fraction of a percent becomes a large sum.

5. Your own behaviour matters more than timing

   The households that traded most earned 11.4% a year while the market returned 17.9% (Barber & Odean, 2000). Losses weigh more heavily than equal gains (Kahneman & Tversky, 1979), and checking your portfolio often makes shares feel riskier than they are over your real horizon (Benartzi & Thaler, 1995). A fixed monthly amount that you leave alone takes the timing out of it.

6. The US century is the best case, not the rule

   Of 39 stock markets in the twentieth century, the US had the highest real price gains, well above the median market; many others were interrupted by war, expropriation or long slumps (Jorion & Goetzmann, 1999). Broad international diversification such as the MSCI World spreads that risk — and the STOXX Europe 600's lower return since 1992 shows that the S&P 500's record should not be taken for granted.

Frequently asked

Is investing always better than saving?

No. Within a few years an index can fall by 40% or more — the MSCI World lost 40% in 2008 — and recovering can take years. Money you need within about five years, such as a buffer or the deposit for a home, belongs in a savings account. For money you can leave alone for ten years or more, history favours investing, without a guarantee.

Which return should I fill in?

The calculator starts at the index's average since its data begins. That is the past, not a promise: returns differ from decade to decade, and some researchers expect less in the decades ahead than the last century delivered. Try a cautious 5 or 6% as well, and look at the band: it shows how far real periods strayed from the average.

Why the S&P 500 if I invest in euros?

It has the longest reliable record, almost a hundred years. Its returns, like the MSCI World's, are in US dollars: for a euro investor the exchange rate adds its own ups and downs on top. The STOXX Europe 600 is in euros, but its data only starts in 1992, so it has fewer long periods to learn from.

How are taxes handled?

With this year's rules of the country you choose, simplified and kept the same every year. In the Netherlands box 3 taxes savings and investments every year on a deemed return, or on the actual return if that is lower. Elsewhere the calculator taxes interest every year and investment gains once, when you sell; the allowances count per person. Open 'More assumptions' to see and change the rates.

What does inflation do to my savings?

Inflation lowers what your money can buy. When the interest is below inflation, your balance grows while its buying power shrinks. The tiles show both results in today's money as well, at the inflation you enter under 'More assumptions'.

What do I need to start investing?

An investment account with a bank or broker, and a choice of fund. An index fund (often an ETF) follows a whole market at low cost; look at its yearly costs (the TER) and your broker's fees. Many people first keep a buffer of a few months' spending in a savings account.

Sources

Data

1. Damodaran, A. (2026). Historical Returns on Stocks, Bonds and Bills: 1928–2025 (S&P 500 with dividends, 3-month Treasury bills). NYU Stern School of Business. https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html
2. MSCI (2026). MSCI World Index (USD), gross annual returns 1970–2025. MSCI Inc.; the yearly figures as compiled in Wikipedia’s “MSCI World” article. https://www.msci.com/indexes/index/990100
3. STOXX (2026). STOXX Europe 600 Net Return (EUR), year-end levels 1991–2025. STOXX Ltd. https://stoxx.com/index/sxxr/

Research

1. Anarkulova, A., Cederburg, S., & O’Doherty, M. S. (2022). Stocks for the long run? Evidence from a broad sample of developed markets. Journal of Financial Economics, 143(1), 409–433. https://doi.org/10.1016/j.jfineco.2021.06.040
2. Barber, B. M., & Odean, T. (2000). Trading Is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. The Journal of Finance, 55(2), 773–806. https://doi.org/10.1111/0022-1082.00226
3. Benartzi, S., & Thaler, R. H. (1995). Myopic Loss Aversion and the Equity Premium Puzzle. The Quarterly Journal of Economics, 110(1), 73–92. https://doi.org/10.2307/2118511
4. Bessembinder, H. (2018). Do stocks outperform Treasury bills? Journal of Financial Economics, 129(3), 440–457. https://doi.org/10.1016/j.jfineco.2018.06.004
5. Bodie, Z. (1995). On the Risk of Stocks in the Long Run. Financial Analysts Journal, 51(3), 18–22. https://doi.org/10.2469/faj.v51.n3.1901
6. Carhart, M. M. (1997). On Persistence in Mutual Fund Performance. The Journal of Finance, 52(1), 57–82. https://doi.org/10.1111/j.1540-6261.1997.tb03808.x
7. French, K. R. (2008). Presidential Address: The Cost of Active Investing. The Journal of Finance, 63(4), 1537–1573. https://doi.org/10.1111/j.1540-6261.2008.01368.x
8. Jordà, Ò., Knoll, K., Kuvshinov, D., Schularick, M., & Taylor, A. M. (2019). The Rate of Return on Everything, 1870–2015. The Quarterly Journal of Economics, 134(3), 1225–1298. https://doi.org/10.1093/qje/qjz012
9. Jorion, P., & Goetzmann, W. N. (1999). Global Stock Markets in the Twentieth Century. The Journal of Finance, 54(3), 953–980. https://doi.org/10.1111/0022-1082.00133
10. Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica, 47(2), 263–291. https://doi.org/10.2307/1914185
11. Mehra, R., & Prescott, E. C. (1985). The equity premium: A puzzle. Journal of Monetary Economics, 15(2), 145–161. https://doi.org/10.1016/0304-3932(85)90061-3
12. Sharpe, W. F. (1991). The Arithmetic of Active Management. Financial Analysts Journal, 47(1), 7–9. https://doi.org/10.2469/faj.v47.n1.7

Your savings and investments, in one plan

Track your savings accounts, funds and shares in YourFi next to your home and pension, and follow your plan to age 100.