Compound interest calculator

Enter a starting amount, what you add each month and an interest rate to see what your savings could grow to. You can switch to simple interest, and choose whether interest is added monthly, yearly or daily. A table shows every year.

After 10 years

£16,215.81

£13,000.00 paid in and £3,215.81 interest

Your details

Starting amount

Added each month

Interest rate a year %

Years

Interest added

Type

At a glance
Figure	Amount
Final balance	£16,215.81
Total paid in	£13,000.00
Interest earned	£3,215.81
AER	4.07%

How this was worked out

Total paid in: £1,000.00 + (£100.00 × 12 × 10) = £13,000.00
Monthly factor: (1 + 0.04 ÷ 12)^(12 ÷ 12) = 1.0033333
AER: ((1 + 0.04 ÷ 12)^12 − 1) × 100 = 4.07%
Interest earned: £16,215.81 − £13,000.00 = £3,215.81

Year by year

Year by year
Year	Paid in	Interest	Balance
1	£2,200.00	£62.99	£2,262.99
2	£1,200.00	£114.44	£3,577.43
3	£1,200.00	£168.00	£4,945.43
4	£1,200.00	£223.73	£6,369.16
5	£1,200.00	£281.74	£7,850.89
6	£1,200.00	£342.10	£9,393.00
7	£1,200.00	£404.93	£10,997.93
8	£1,200.00	£470.32	£12,668.25
9	£1,200.00	£538.37	£14,406.62
10	£1,200.00	£609.19	£16,215.81

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What the calculator assumes

The interest rate stays the same for the whole time.
You add the same amount at the end of every month and take nothing out.
Interest is added at the frequency you choose and stays in the account.
No tax is taken off the interest. Many savers pay none, because of the Personal Savings Allowance and ISAs.
Figures are in pounds of the day. They are not adjusted for rising prices.

Compound and simple interest

With simple interest you earn interest only on the money you put in. With compound interest you also earn interest on the interest you have already been paid, because it stays in the account and becomes part of the balance.

Over a year or two the difference is small. Over twenty or thirty years it can be large, because each year's interest is worked out on a bigger balance than the year before. The year-by-year table shows this: the interest column grows even when what you pay in stays the same.

Most UK savings accounts pay compound interest. Simple interest is more common on some bonds and loans, where the interest is paid out rather than added to the balance.

How often interest is added

Banks quote a yearly rate, but they may add interest monthly, yearly or daily. The more often interest is added, the sooner it starts earning interest itself, so the same yearly rate grows a little faster when it is added monthly.

That is why UK accounts also show an AER, the annual equivalent rate. The AER tells you what the rate would give over a year if interest were added once a year, which lets you compare accounts that add interest in different ways. The calculator shows the AER for the rate and frequency you choose.

What it leaves out

Tax on interest. Interest above your Personal Savings Allowance is taxed as income unless the money is in an ISA.
Rising prices. To see what a future amount is worth in today's money, try the inflation calculator with past years as a guide.
Fees, bonus rates that end after a year, and limits on how much you can pay in.

If you are building up savings a little at a time, the savings challenge calculator sets out the 1p a day and 52-week challenges. Saving for a home? The house deposit calculator adds the tax on the purchase to your target. To see what the same sums look like from the borrowing side, use the loan repayment calculator.

Official guidance

Tax on savings interest on GOV.UK
Individual Savings Accounts (ISAs) on GOV.UK

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Email [email protected]. Tell us what you entered and what you expected to see. Fixed errors are listed on the corrections page.