Savings & Compound Interest Calculator
See how your savings grow with compound interest and regular contributions — adjust the sliders to explore scenarios instantly.
Your savings details
Assumes monthly compounding and a fixed rate throughout. Actual returns will vary — interest rates change and tax may apply above your Personal Savings Allowance.
How compound interest works
Compound interest means you earn interest on your interest. Each month, the interest earned is added to your balance, which then earns more interest the following month. Over time this creates an accelerating growth curve — often called the "snowball effect". The earlier you start and the longer the period, the more powerful it becomes.
AER vs gross rate
Banks quote two rates: the gross rate (the base rate per year before compounding) and the AER (Annual Equivalent Rate), which shows what you'd earn if interest were compounded and paid once a year. AER lets you compare accounts that compound at different frequencies on a like-for-like basis. This calculator uses AER and assumes monthly compounding.
Tax and ISAs
Interest earned on savings counts as income. Basic-rate taxpayers have a £1,000 Personal Savings Allowance; higher-rate taxpayers get £500. Savings held in a Cash ISA are entirely tax-free and don't count toward the allowance. The 2025/26 ISA allowance is £20,000 per year. Read our guide to the best savings accounts to find top rates.
Inflation
This calculator shows nominal (before-inflation) growth. If inflation runs at 2–3%, a 4% rate only grows your purchasing power by 1–2% per year. For long-term goals (10+ years), you may want to consider Stocks & Shares ISAs or other investments alongside cash savings — though these carry higher risk. Read our Lifetime ISA guide if you're saving for your first home or retirement.