Savings & compound interest calculator
Find out how much your savings could grow with regular deposits and compound interest.
How compound interest works
Each time interest is added, it starts earning interest itself. Over long periods this snowball effect makes a big difference. The rate matters, but so does time. Starting early is the most powerful thing you can do.
This calculator converts the AER into an equivalent monthly rate. It assumes deposits are made at the end of each month and the rate stays the same throughout.
Where to keep your savings
- Easy-access savings: withdraw whenever you like. The rate can change at any time.
- Fixed-rate bonds: lock your money away for 1–5 years in exchange for a guaranteed rate.
- Cash ISAs: interest is tax-free. You can pay in up to £20,000 a year across all your ISAs in 2026/27. From 6 April 2027, under-65s can only put £12,000 of that into cash.
- Regular savers: often the highest rates, but limits on how much you can pay in each month.
Savings with UK-authorised banks and building societies are protected up to £120,000 per person, per banking licence, by the Financial Services Compensation Scheme (FSCS).
Frequently asked questions
What is compound interest?
Compound interest means you earn interest on your interest as well as on your original money. If you save £1,000 at 4% a year, you earn £40 in year one. In year two you earn 4% on £1,040, which is £41.60, and so on.
How much will £100 a month grow to?
Saving £100 a month for 10 years at 4% interest compounded monthly gives about £14,670. You'd have paid in £12,000, so about £2,670 is interest.
Do I pay tax on savings interest?
Most people can earn some interest tax-free under the Personal Savings Allowance: £1,000 a year for basic-rate taxpayers, £500 for higher-rate taxpayers and £0 for additional-rate taxpayers. Interest earned in a cash ISA is always tax-free.
What's the difference between AER and gross rate?
AER (annual equivalent rate) shows what you'd earn in a year once compounding is included, so you can compare accounts fairly. If an account pays interest monthly, its gross rate will be slightly lower than its AER.
Last checked 5 October 2026.