A fund's expense ratio looks small, but it is charged every year on your whole balance. Enter your investment plan and up to three expense ratios to see the fees you would pay, the growth those fees would have earned, and how far apart the ending balances end up.
Last updated:
Investment
$
$
%
years
Expense ratios to compare
%
%
%
Leave B or C empty to compare fewer funds.
Enter your values to see the result.
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How to use the Expense Ratio Calculator
Enter your starting amount and how much you add each month.
Set the expected annual return before fees and the number of years.
Type up to three expense ratios, such as an index fund, an active fund and an advisor-managed account.
Read the total cost of fees and the gap between the cheapest and the most expensive fund.
Check the chart and table to see how the difference grows each year, and download it as CSV.
How expense ratio fees compound
The fee is a percentage of your balance, so it grows as your balance grows. Each month this calculator applies:
Bm = Bm−1 × (1 + r/12) × (1 − e/12) + C
r = expected annual return before fees, e = expense ratio, C = monthly contribution.
Fee for the month = Bm−1 × (1 + r/12) × e/12.
Total cost of fees = ending balance at e = 0 − ending balance with the fee.
For a lump sum the effect is roughly a lower growth rate: a 7% return with a 1% fee grows like a 6% investment. Over 30 years, $10,000 grows to about $81,200 at 7% with no fee, but only about $60,100 with a 1% fee, close to what a plain 6% return would give and about a quarter less.
Cost of fees on $10,000 invested (7% return)
Ending balance and total cost after fees, lump sum only, monthly compounding as above.
Expense ratio
After 10 years
After 20 years
After 30 years
Cost at 30 years
0% (benchmark)
$20,097
$40,387
$81,165
—
0.05%
$19,996
$39,986
$79,957
$1,208
0.25%
$19,600
$38,417
$75,300
$5,865
0.50%
$19,116
$36,543
$69,857
$11,308
1.00%
$18,183
$33,064
$60,121
$21,044
1.50%
$17,296
$29,914
$51,739
$29,426
2.00%
$16,451
$27,063
$44,522
$36,643
Illustration only: real returns vary and are not guaranteed.
Frequently asked questions
What is an expense ratio?
The expense ratio is the yearly fee a mutual fund or ETF charges, expressed as a percentage of the money you have invested. A 0.50% expense ratio costs $5 a year for every $1,000 invested. It is taken out of the fund's assets, so you never see a bill; it simply lowers your return.
How does this calculator work out the cost of fees?
It simulates your account month by month: the balance grows by the annual return ÷ 12, one twelfth of the expense ratio is deducted from the balance, then your monthly contribution is added. The same plan with a 0% fee gives the benchmark. Total cost = no-fee balance − balance with fees.
What is the difference between fees paid and lost growth?
Fees paid is the sum of every fee deducted. Lost growth is the extra return that money would have earned if it had stayed invested and compounded. Over long periods the lost growth can be as large as the fees themselves.
What is a good expense ratio?
Broad stock and bond index funds and ETFs commonly charge well under 0.20%, and some charge 0.03% or less. Actively managed funds often charge 0.50% to 1% or more. A lower fee is not the only factor, but costs are one of the few things you control.
Is the expense ratio the only fee I pay?
No. Funds can also have sales loads, 12b-1 fees (usually included in the expense ratio), trading commissions and account or advisory fees. To include an advisory fee, add it to the expense ratio, for example 0.25% advisory + 0.05% fund = 0.30%.
Are the results guaranteed?
No. Real returns vary from year to year, while this calculator uses a constant return so the effect of the fee is easy to see. The percentage gap caused by fees is quite stable though, which is why the comparison is useful.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.