Compound interest calculator
See what regular saving turns into over time, and how much of the final figure is interest rather than your own money.
Rates taken from the official source and last checked on 1 August 2026.
Why the last few years do the heavy lifting
Compounding means interest earns interest. The effect is small at first and then accelerates, which is why the final years of a long savings run add far more than the early ones, even though the amount paid in each month never changes.
The practical consequence: starting earlier matters more than paying in more. Ten years of £100 a month usually beats five years of £200 a month, despite both totalling the same contributions.
A worked example
Start with £1,000, add £200 a month for ten years at 5% compounded monthly. You pay in £25,000 and finish with roughly £32,800. About £7,800 of the balance is interest, which is money you did not deposit.
Run the same figures for twenty years and the contributions roughly double to £49,000 while the balance reaches around £85,300. The contributions doubled; the interest went from £7,800 to £36,300.
Tax on the interest
Interest earned inside an ISA is free of tax, with an annual subscription limit of £20,000. Outside an ISA, a personal savings allowance covers a slice of interest depending on your tax band, and anything above it is taxable at your marginal rate. The figures here are gross, before any tax.
Savings against investments
The same maths describes both, though the assumption behind the rate is different. A savings account rate is knowable in advance. An investment return is an average looking backwards, with individual years anywhere either side of it, including negative ones. Treat a steady rate as a sketch rather than a forecast.
Common questions
What does compounding frequency change?
How often earned interest starts earning interest of its own. Monthly compounding beats yearly at the same headline rate, though the gap is smaller than most people expect: on a 5% rate over ten years it is worth a couple of percent on the final balance.
When are the monthly amounts added?
At the end of each month, before interest is applied for any month where compounding falls due. Paying in at the start of the month would earn slightly more.
Is this savings or investing?
The maths is the same, the assumption is not. A savings rate is close to fixed for a period. Investment returns move about, sometimes sharply, so a steady annual figure is a rough average rather than a plan.
Do I pay tax on the interest?
Interest inside an ISA is tax free. Outside one, a personal savings allowance covers some interest depending on your tax band, and anything above that is taxable. This calculator shows the gross figure.