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Expense Ratio Calculator

Enter what you invest, a yearly return and two funds’ expense ratios. You’ll see what each fund grows to, the fees each one takes year by year, and how much the higher fee costs you in the end.

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years
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%

What Fund B’s higher fee costs you

$45,566

Fund B ends with this much less after 30 years, by September 2056

Fund A balance
$249,630
0.05% fee
Fund B balance
$204,064
1% fee
Extra fees paid
$23,837
in Fund B
Growth those fees lost
$21,728
what they would have earned
You put in
$82,000
the same in both

Investing $10,000 now and $200 a month for 30 years at 6% a year before fees, Fund A (0.05%) grows to about $249,630 and Fund B (1%) to about $204,064. Fund B’s higher fee costs you $45,566: $23,837 more in fees, plus $21,728 of growth that money would have earned if it had stayed invested.

Fund A vs Fund B

MeasureFund A (0.05%)Fund B (1%)
Balance at the end$249,630$45,566 more$204,064
Fees paid$1,451$23,837 less$25,288
Fees plus the growth they cost$2,708$48,274
You put in$82,000$82,000
Your balance in each fund

The same money in both funds. The gap between the lines is what the higher fee costs you.

  • Fund A (0.05%)
  • Fund B (1%)
  • You put in
$0$50K$100K$150K$200K$250KNowYr 5Yr 10Yr 15Yr 20Yr 25Yr 30$249,630$204,064$82,000
Fees paid each year in Fund B

Fund B takes $114 in the first year and $1,979 in the last, because the fee is a percentage of a growing balance. Fund A takes $121 in the last year.

$1,979$0$500$1K$1.5K$2KYr 1Yr 4Yr 7Yr 10Yr 13Yr 16Yr 19Yr 22Yr 25Yr 28Yr 30

Year by year

30 years, fees and balances in both funds

What this calculator assumes

  • Both funds earn the same return before fees, and it’s the same every year. Real returns go up and down, and you can lose money.
  • The return you enter is for a whole year: with no fee, $100 grows to $106 at 6%. It’s added a little each day.
  • The fee is worked out daily, at 1/365 of the expense ratio, on the average of that day’s starting balance and its balance after that day’s growth, and taken from your balance. This gives the same results as FINRA’s Fund Analyzer: for a single investment, ours matched it to the cent in every case we checked. Over a year the fees come to about the expense ratio times your average balance.
  • Each expense ratio stays the same the whole time.
  • Monthly contributions are added at the end of each month, after that month’s growth and fees. A month is one twelfth of a 365-day year.
  • Only the expense ratio is included. Sales loads, redemption fees, brokerage commissions, account fees and adviser fees are left out, and so is tax. Figures aren’t adjusted for inflation.

These are estimates to help you understand the numbers, not financial advice. Check the exact figures with your lender or a qualified adviser before making a decision.

What an expense ratio is

Every mutual fund and ETF costs money to run. Someone has to pick the investments, keep the records and send out reports, and the fund passes those costs on to its investors. The expense ratio is that cost for a year, shown as a percentage of the fund’s average net assets. Investor.gov, the SEC’s investor education site, lists what it can include: management fees, distribution and service (12b-1) fees, and other expenses such as legal and accounting costs.

You never pay it as a bill. The fund pays its expenses out of fund assets, which lowers the value of everyone’s shares. So the fee is easy to miss: it shows up only as a balance that’s a little smaller than it would otherwise be.

Why small fees add up

A 1% fee sounds tiny, but it’s charged every year on your whole balance, including all the growth you’ve built up. As your balance grows, so does the fee. And the money the fund takes can’t grow for you anymore, so a fee costs you what you pay plus what that money would have earned.

The SEC shows this with a simple example. $100,000 that grows 4% a year for 20 years is worth about $208,000 with a 0.25% yearly fee, about $198,000 with a 0.50% fee, and about $179,000 with a 1% fee. The fee difference of three quarters of a percentage point costs almost $30,000. The SEC’s bulletin puts it this way: a fund with higher costs must perform better than a lower-cost fund to give you the same returns.

How the calculator works

You enter one investment (a starting amount, monthly contributions, a yearly return and a number of years) and two expense ratios. The calculator runs the same money through both funds. The only difference between them is the fee.

The return is added a little each day, so that with no fee your money grows by exactly the yearly return you entered. The fee is worked out daily too: each day the fund takes 1/365 of its expense ratio on your balance. Over a year, that comes to about the expense ratio times your average balance. For a single investment, these results match FINRA’s Fund Analyzer to the cent. That’s the tool the SEC’s investor bulletins suggest for comparing fund fees.

The calculator then shows three numbers for the higher-fee fund:

  • Extra fees paid: how much more that fund takes in fees than the cheaper one.
  • Growth those fees lost: what the extra fees would have earned if they’d stayed invested.
  • What the higher fee costs you: the two added together, which is exactly the gap between the two funds’ final balances.

Worked example

Say you invest $10,000 now and $200 a month for 30 years, and the investments earn 6% a year before fees. You compare Fund A, with an expense ratio of 0.05%, and Fund B, at 1%. Either way you put in $82,000.

  • Fund A grows to $249,630 and takes $1,451 in fees over the 30 years.
  • Fund B grows to $204,064 and takes $25,288 in fees. In the first year its fee is $114; in the last year it’s $1,979, because by then the balance is much bigger.
  • Fund B ends with $45,566 less. That’s $23,837 of extra fees, plus $21,728 of growth that money would have earned if it had stayed invested.

The two expense ratios are only 0.95 percentage points apart, yet over 30 years the higher one costs you about 56% of everything you put in.

Finding and comparing fees

  • Read the fee table. Every mutual fund and ETF prospectus has a standardized table of fees and expenses. The expense ratio is the line called “Total annual fund operating expenses”. Fund expenses also appear in the shareholder reports funds send twice a year.
  • Compare funds side by side. FINRA’s free Fund Analyzer covers more than 30,000 mutual funds, ETFs, exchange-traded notes and money market funds. Look up a fund’s expense ratio there, then enter it here.
  • Check the share class. Many mutual funds sell several share classes that hold the same investments but charge different fees, so the same fund can cost you more or less depending on the class you buy.
  • Look beyond the expense ratio. Some funds charge sales loads or redemption fees, and you may pay brokerage commissions or an adviser’s fee as well. The costs a fund pays to buy and sell its own investments aren’t in the expense ratio either.
  • Fees aren’t the only thing that matters. The SEC notes that choosing a fund involves more than picking the one with the lowest fees. Check what the fund invests in and whether its risks suit your goals.

To see how regular investing adds up over time, try our compound interest calculator or the index investing calculator, which uses real market history.

Frequently asked questions

What is an expense ratio?

It’s the yearly cost of owning a mutual fund or ETF, shown as a percentage of the fund’s average net assets. It pays for running the fund: management fees, 12b-1 (distribution and service) fees and other expenses such as legal and accounting costs. A fund with a 1% expense ratio takes about $1 a year for every $100 you have in it.

How do I pay the expense ratio?

You don’t get a bill. The fund pays its operating expenses out of fund assets, meaning the money its investors put in. That lowers the value of the fund, and so the value of your shares. You pay it through a smaller balance, not a separate charge.

Why does a small difference in fees add up to so much?

The fee is charged every year on your whole balance, including the growth you’ve built up. Money the fund takes in fees also stops growing, so you lose the fee and everything it would have earned. The SEC gives an example: $100,000 growing 4% a year for 20 years ends at about $208,000 with a 0.25% yearly fee, but about $179,000 with a 1% fee.

Where can I find a fund’s expense ratio?

In the fee table in the fund’s prospectus, as “Total annual fund operating expenses”. Every mutual fund and ETF has to include this standardized table. Fund expenses are also in the shareholder reports funds send twice a year. FINRA’s free Fund Analyzer lists expense ratios for thousands of funds and lets you compare them.

Does the expense ratio include all of a fund’s costs?

No. Some mutual funds also charge shareholder fees, such as sales loads, redemption fees, exchange fees and account fees. You may also pay brokerage commissions or an adviser’s fee. And the costs a fund pays when it buys and sells its own investments aren’t in the expense ratio either. All of these reduce what you end up with.

Can I use this calculator for an adviser’s fee?

Roughly, yes. An investment adviser may charge an ongoing yearly fee based on the value of your portfolio, which works much like an expense ratio. To see the effect, add the adviser’s percentage to your fund’s expense ratio. This calculator takes the whole amount daily, like a fund’s expense ratio, and your adviser may bill it differently, so treat the result as an estimate.

Is the fund with the lowest expense ratio always the best choice?

Not always, but it has a head start. A fund with higher costs must perform better than a lower-cost fund just to give you the same return. The SEC also says that choosing a fund involves more than picking the one with the lowest fees. Check what the fund invests in, how risky it is, and whether it fits your goals.