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Compound Interest Calculator

Work out how your savings grow in easy-access accounts and fixed-rate bonds. Low-risk products covered by the FSCS (typically 4-5% AER).

FSCS protected Low-risk saving

Your savings details

GBP
Regular contributions
Return and term
Expected annual return 7%
Investment term 20 years

Final balance

£144,573
in 20 years
Starting amount£10,000
Total contributions£48,000
Interest earned£86,573
Total return+149%
Rule of 72
Your money doubles in 10.3 years

How your savings grow

Total balance
Contributions

Year-by-year breakdown

Year Contributions Interest Total balance

Understand the compound interest inputs

Every field in the calculator has a decisive impact on the final size of your savings pot

Starting amount

Your opening balance

The money you have already put by, which the growth is calculated from. The larger your starting amount, the more powerful compounding is from day one, because the interest is worked out on a bigger base.

Example
£1,000 at 4% a year for 10 years = £1,480. £10,000 at the same rate = £14,802. The ratio of interest to capital is the same, but the absolute effect is 10 times larger.

Monthly contribution

Your regular saving

The amount you pay in each month. Regular contributions are the key to reaching big savings goals. Even small sums add up over the long run thanks to the snowball effect of compound interest.

Example
£100/month for 10 years at 4% adds £14,725 on top of your starting amount. With no contributions, the same 10 years at 4% on £1,000 earns only £480 in interest.

Interest rate

The annual return on your savings

The rate offered by your account, bond or savings fund. In the UK right now: easy-access accounts 4-4.5%, fixed-rate bonds 4-5%, low-risk funds 4-6%. Every extra percentage point makes a huge difference over the long term.

Example
£10,000 over 5 years: at 2% = £11,041 | at 3% = £11,593 | at 5% = £12,763. Three extra points of interest mean roughly 15% more in your final pot.

Saving term

Your time horizon

How long you leave the money to grow without touching it. Time is the single most decisive factor: doubling the term more than doubles the result in many cases, because interest grows exponentially.

Example
£5,000 at 4%: 10 years = £7,401 | 20 years = £10,955 | 30 years = £16,218. Over 30 years you get more than triple, not just triple.

Easy-access savings account

With rates around 4-4.5% AER at some banks and building societies, an easy-access savings account beats leaving money idle in a current account. Compare the latest deals before you let your cash sit there earning nothing.

Fixed-rate bonds for set terms

If you won't need the money for 1-2 years, a fixed-rate bond usually pays a better rate than easy-access. Shop around before you commit and check the provider is covered by the Financial Services Compensation Scheme.

Automate your saving

Setting up a standing order to your savings the day after payday works far better than trying to save whatever is left at the end of the month. Treat saving as a priority fixed cost, not an afterthought.

How compound interest works

Compound interest is often called the eighth wonder of the world, a line widely attributed to Albert Einstein. Unlike simple interest, where the interest is worked out only on the original capital, compound interest reinvests your gains so that you earn interest on your interest. Over the long run the snowball effect is exponentially larger.

Example: £5,000 to start + £200/month for 10 years at 3%

Year Total paid in Interest accrued Total balance
Year 1 £7,400 £228 £7,628
Year 3 £12,200 £952 £13,152
Year 5 £17,000 £2,287 £19,287
Year 7 £21,800 £4,239 £26,039
Year 10 (final) £29,000 £7,714 £36,714

Comparison of UK savings options

Not every savings product applies compound interest in the same way. Here we compare the main options available in the UK in 2026:

Savings option Typical return 2026 Risk Access
Easy-access savings account 4-4.5% AER None Instant
Fixed-rate bond 4.3-5% AER None Locked (term)
Cash ISA 4-4.5% AER, tax-free None Varies
Stocks & shares ISA (cautious funds) 4-6% a year Low High
UK government bonds (gilts) 4-4.5% a year Very low Medium

Tax note: Interest from savings counts as income, but the Personal Savings Allowance lets a basic-rate taxpayer earn £1,000 of interest tax-free each year (£500 for higher-rate taxpayers, £0 for additional-rate). Anything above that is taxed at your marginal rate (20%, 40% or 45%). Interest held inside a Cash ISA is completely tax-free, within the £20,000 annual ISA allowance.

Tip: Savings held with UK-authorised banks and building societies are protected by the Financial Services Compensation Scheme (FSCS) up to £85,000 per person, per banking licence. If you hold more than that, spread it across separate institutions to keep it all covered.

The compound interest formula

The formula for working out the final balance with compound interest and regular contributions is:

FB = SA × (1 + r)^n + C × [((1 + r)^n - 1) / r]

Where: FB = Final balance, SA = Starting amount, r = Interest rate per period, n = Number of periods, C = Contribution per period.

Note: This calculator gives an estimate of how your savings grow with compound interest. It does not allow for tax or inflation. MoneyHelper offers free, government-backed guidance to help you plan your saving.

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Frequently asked questions about compound interest

We answer the most common questions about compound interest and saving

With simple interest the interest is always worked out on the original capital: if you invest £1,000 at 5%, you earn £50 every year however long you leave it. With compound interest, the interest is added to the capital and earns further interest in the next period. With the same example, in the second year you earn 5% on £1,050, then on £1,102.50, and so on. Over the long run the snowball effect is exponentially larger than simple interest.
In the UK, compound interest applies to investment and index funds (gains are reinvested automatically), accumulation ETFs, pensions and savings accounts that pay interest periodically and add it to the balance. Many fixed-rate bonds pay the interest at maturity without reinvesting it, so they behave more like simple interest unless you roll the bond over and reinvest the interest.
With pure compound interest (no extra contributions), £10,000 at 5% a year becomes £26,532 after 20 years: the original capital plus £16,532 of interest. That is a 165% total return on what you put in. If you also added £100 a month, the final balance would be roughly £51,000. You can model any scenario with the calculator above by adjusting the starting amount, the return and the contributions.
Savings interest counts as income, but most people pay no tax on it thanks to the Personal Savings Allowance: a basic-rate taxpayer can earn £1,000 of interest tax-free each year, a higher-rate taxpayer £500, and an additional-rate taxpayer £0. Interest above the allowance is taxed at your marginal rate (20%, 40% or 45%). Inside a Cash ISA or a stocks & shares ISA, all interest and gains are completely tax-free, within the £20,000 annual ISA allowance, which lets compounding work on the full amount for longer.
The Rule of 72 is a mental shortcut for estimating how many years it takes to double an investment with compound interest: divide 72 by the annual return as a percentage. At 4% it takes 18 years (72÷4), at 6% it takes 12 years (72÷6), at 9% it takes 8 years (72÷9). It is a very handy approximation for quickly comparing scenarios without complex sums. The calculator shows this figure live based on the return you enter.
Yes, and just as powerfully, but against you. If you have a debt with compound interest — such as a credit card at 20-25% APR — the interest you don't pay is added to the balance and earns further interest. A £3,000 debt at 22% APR left unpaid grows to almost £20,000 in 10 years. That is why advisers recommend clearing high-interest debt first before you invest: no investment reliably beats paying 20% interest on a debt.