Expense Ratio Calculator

Expense Ratio Calculator

See how investment fees can quietly reduce your child's account value over time.

S&P 500 Index Fund Assumption
0.03% annual fee — examples: VOO, IVV, SPY

Actively Managed Mutual Fund Assumption
1.00% annual fee
What Is A Fund Fee?
Investment funds charge an annual fee called an expense ratio. The fee is automatically deducted from the fund, so parents usually never receive a separate bill.

Want To Learn More About Investment Fees?

Expense ratios may look small, but they can have a meaningful impact on long-term investment growth. Learn how index fund fees work, why low-cost funds are popular, and how fees can affect your child's future account value.

📖 Read Our Index Fund Fees Guide →

Free Guide: How Parents Build Wealth For Their Children

Learn how small monthly investments, low fees, and time can help build a financial head start for your child.

This calculator provides hypothetical estimates only and does not guarantee future investment returns. Actual returns may be higher or lower. This calculator is for educational purposes only and is not financial advice.

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Why a Small Percentage Can Matter Over Many Years

An expense ratio is the annual operating cost of a fund expressed as a percentage of assets. A difference that looks tiny—such as a few tenths of a percentage point—can matter over long periods because the fee reduces the amount left invested to compound.

Compare funds on the same assumptions

Use the same monthly contribution, time period, and gross return when comparing two fee levels. That isolates the effect of the expense ratio. It does not mean the lower-fee fund will necessarily perform better; investments can have different strategies, risks, holdings, and returns. The calculator is designed to make the cost difference visible, not to rank specific funds.

Example of the decision this can support

If two broadly similar options are being considered for a long-term child account, understanding recurring fees can be one part of the comparison. Parents should also consider diversification, risk, account type, trading costs if any, and whether the investment fits the time horizon.

What is simplified

The calculation uses a steady annual return and simplified fee effect. Real funds deduct expenses continuously from assets, returns fluctuate, and other costs or taxes may apply.

Why a tiny percentage deserves attention

An expense ratio is charged year after year, so the dollar effect can become more noticeable as an investment balance grows. This tool helps translate a percentage into an estimated long-term cost so parents can compare otherwise similar options more clearly.

Try this comparison

Compare two hypothetical funds using the same starting balance, contributions and return before fees. Changing only the expense ratio isolates the effect of ongoing fund costs.

Read the result carefully

Projected values are educational estimates. Markets do not produce the same return every year, taxes and account rules can matter, and future purchasing power may differ from today. Use the result to ask better planning questions rather than treating it as a guaranteed outcome.

Use the result as a scenario, not a forecast

Calculator results are educational illustrations based on the numbers you enter. Real outcomes can differ because returns vary and taxes, fees, inflation and account rules may apply. Try more than one return assumption and compare the result rather than relying on a single projection.

Read our calculator methodology and assumptions →