Use the calculator
How this calculator works
Compound interest means you earn interest on your original money and on the interest it has already earned. Over long periods, that second part can become a large share of the total.
Enter a starting balance, a regular monthly amount, an annual interest rate and a number of years. Each month the calculator adds your monthly amount to the balance, then applies one month of interest (the annual rate divided by 12). It repeats this for every month of the term and shows three figures: the estimated final value, the total you paid in, and the estimated growth (the difference between the two).
Because the monthly saving is added at the start of each month, it earns interest in the month it is paid. If your money goes in at the end of the month, the real result will be a little lower.
Worked examples
Each figure was produced by running this calculator.
Example 1: £1,000 start, £250 a month, 4.5% for 10 years
You pay in £31,000 in total. The estimated final value is £39,508.26, so £8,508.26 comes from interest.
Example 2: £100 a month from nothing, 3% for 20 years
Contributions total £24,000 and the estimated value is £32,912.28, including £8,912.28 of growth. Small regular amounts can build up when they are left for a long time.
Example 3: a £10,000 lump sum at 4% for 10 years
With no further contributions, the estimated value is £14,908.33, or £4,908.33 of growth. Because interest is compounded monthly, this is slightly more than you would get with interest added once a year at the same rate.
Tax allowances on savings for 2026/27
| Allowance | Amount |
|---|---|
| ISA allowance (all ISAs combined) | £20,000 a year |
| Personal Savings Allowance, basic-rate taxpayer | £1,000 of interest |
| Personal Savings Allowance, higher-rate taxpayer | £500 of interest |
| Personal Savings Allowance, additional-rate taxpayer | £0 |
| Starting rate for savings | Up to £5,000, if other taxable income is under £17,570 |
The calculator ignores tax. Interest above your allowances may be taxable.
Assumptions and what this calculator does not cover
- Fixed rate: the rate is assumed to stay the same for the whole period. Savings rates change, often after changes to Bank Rate, and investment returns are not guaranteed and can be negative.
- Monthly compounding: savings accounts quote an AER, which may assume interest is paid monthly or yearly. Results will differ slightly from your provider's figures.
- Tax, fees and charges: none are deducted. Investment platform and fund charges can reduce growth noticeably over long periods.
- Inflation: results are in future pounds, not today's money. If prices rise, the same amount will buy less.
- Contributions: the monthly amount is assumed never to change or stop.
Getting more from the projection
The most useful way to use this calculator is to compare scenarios rather than rely on one answer. Try the same plan at a lower and a higher rate, and see how much the final value changes. Then try changing the monthly amount or the number of years. For many savers, adding a little more each month or leaving money invested for longer has a bigger effect than finding a slightly higher rate.
Look at the split between contributions and growth. In the early years almost all of the balance is money you have paid in. Growth becomes a larger share only after many years, which is why starting earlier can matter more than saving larger amounts later.
If you are comparing a savings account with an investment, remember that the two carry different risks. A cash account's balance does not fall, although its rate can change. An investment's value can go down as well as up, and past returns are not a reliable guide to the future.
Frequently asked questions
What rate should I enter?
For cash savings, use the rate on an account you could actually open, and remember variable rates can change. For investments, a modest assumed return is safer than a high one, and it is worth testing several rates to see the range.
What is AER?
AER (Annual Equivalent Rate) shows what the interest rate would be if interest were paid and compounded once a year, so you can compare accounts that pay interest at different intervals.
Will I pay tax on the interest?
Interest in an ISA is tax-free. Outside an ISA, most people can earn some interest tax-free under the Personal Savings Allowance (£1,000 for basic-rate and £500 for higher-rate taxpayers). Interest above that is usually taxable.
How does inflation affect the result?
Inflation reduces what your future balance can buy. The Bank of England targets 2% inflation, but actual inflation varies. For a rough idea of value in today's money, compare your assumed interest rate with recent inflation figures from the ONS.
Why is my bank's projection different?
Banks may compound on a different schedule, pay interest on a specific date, use daily balances or include bonus rates that end after a set period.
Sources
- GOV.UK: Individual Savings Accounts (ISAs)
- GOV.UK: Tax on savings interest – how much tax-free interest you get
- Bank of England: Interest rates and Bank Rate
- Bank of England: Inflation and the 2% target
- ONS: Consumer price inflation, latest release
Rates for tax year 2026/27, last reviewed October 2026.
Results are estimates for planning, not financial or tax advice. See our terms and methodology.