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Expense Ratio Calculator

See how much a fund's annual expense ratio really costs you over time, and how much bigger your balance would be with a cheaper fund. Enter your numbers and press Calculate.

Written by TopicDrill Editorial Team·Updated June 2026

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Fund details

Fill in the details, then press Calculate.

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$

Total cost of the fee

$156,225

Balance after fees$791,152
Balance with no fee$947,377
Total lost to fees$156,225

You pay about $446 in fees the first year. Over time the drag compounds into $74,187 of fees paid.

Fee drag over time

No fee After fee
$0$237k$474k$711k$947k0 yr15 yr30 yr

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How the expense ratio cost is calculated

Each year the calculator grows your balance at the expected return, then deducts the expense ratio from that balance, just like a real fund does. It runs the same scenario a second time with no fee. The gap between the two ending balances is the true cost of the fee, which is far larger than the simple annual percentage because every dollar lost to fees also stops compounding.

That is why the chart shows two lines drifting apart. The fee looks tiny in year one, but the space between the lines widens steadily as the years pass.

A quick example

Invest $50,000 and add $6,000 a year for 30 years at a 7% return. A fund charging 0.75% leaves you with noticeably less than an identical fund charging nothing, and the difference can run into six figures. Switching to a low cost index fund at 0.05% keeps most of that money in your pocket.

Things to keep in mind

Returns are never guaranteed, so treat the ending balances as estimates. Fees, however, are charged whether the market rises or falls, which is what makes them worth minimizing. For investor basics on fund costs, the SEC investor education site is a reliable source. Compare growth scenarios with our compound interest calculator.

Frequently asked questions

What is an expense ratio?

An expense ratio is the annual fee a mutual fund or ETF charges, shown as a percentage of the money you have invested. A 0.50% ratio means you pay $5 a year for every $1,000 invested. It is deducted from the fund's assets automatically, so you never see a separate bill.

Why does a small fee matter so much?

Because the fee is charged every year and reduces the balance that compounds. A 0.75% ratio instead of 0.10% might cost only a few dollars at first, but over 30 years the forgone growth can add up to tens of thousands of dollars on a large portfolio.

What is a good expense ratio?

Broad index funds and ETFs often charge between 0.03% and 0.20%. Actively managed funds tend to charge 0.50% to 1.00% or more. Lower is generally better, since fees are one of the few costs you can control with certainty.

Is the expense ratio the only fee I pay?

No. Some funds also charge sales loads, redemption fees or trading costs, and your brokerage may add account or transaction fees. The expense ratio is the largest recurring cost for most index investors, but always read the full fee disclosure.

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