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Savings calculator

Compound Interest Calculator

See how your savings could grow over time. Add a monthly amount, choose how often interest compounds, and get a year-by-year breakdown, or work out what to save to hit a goal. Free, no signup.

Free, no signupAny currencyMonthly compounding modelled
Your savings
£
What you'll add each month
£
Annual rate (AER)
%
yrs
You’d have
£32,703
after 10 years+£7,703 interest
2y4y6y8y10y
Today10y
You put in
£25,000
Interest earned
+£7,703
Year-by-year growth
YearPaid inInterestBalance
1£3,400£107£3,507
2£5,800£342£6,142
3£8,200£712£8,912
4£10,600£1,224£11,824
5£13,000£1,885£14,885
6£15,400£2,702£18,102
7£17,800£3,684£21,484
8£20,200£4,839£25,039
9£22,600£6,175£28,775
10£25,000£7,703£32,703
Estimate only, a guide, not financial advice.
Simon Chadwick
Simon Chadwick
Founder, Orbit Money
Method: monthly compounding simulationUpdated: 11 July 2026Sources: gov.uk

How compound interest works

Compound interest is the reason small, regular saving turns into a meaningful sum over time. Each time interest is paid, it’s added to your balance, so the next round of interest is calculated on a slightly bigger number. Over months and years that snowball effect does most of the heavy lifting, especially when you keep topping the pot up.

The maths behind it is the formula A = P(1 + r/n)nt, where P is your starting amount, r is the annual rate, n is how many times a year interest is applied, and t is the number of years. This calculator runs that month by month and layers your regular contributions on top, so the total you see reflects both your deposits and the interest they earn.

Simple vs compound interest

Simple interest only ever pays on your original deposit. Compound interest pays on your deposit plus all the interest already earned. On a £5,000 balance at 5%, simple interest pays £250 every year forever; compound interest pays £250 in year one, then more each year as the balance climbs. Over a decade the compound version pulls clearly ahead, and the longer you leave it, the wider the gap.

Tax on savings interest in the UK

Interest can be taxable once it passes your Personal Savings Allowance: £1,000 tax-free for basic-rate taxpayers, £500 for higher-rate, and none for additional-rate taxpayers. Anything above that is taxed at your income tax rate. Interest earned inside a cash ISA is always tax-free, up to the annual ISA allowance. Allowances change from time to time, so confirm the current figures on GOV.UK before making decisions, this tool is a guide, not financial advice.

Using this as a savings interest calculator

The same maths a savings interest calculator uses is what powers this tool. Enter a starting balance, a regular monthly deposit and an interest rate (use the account’s AER), and it shows how much interest you’ll earn and how your savings grow, year by year. Leave the monthly deposit at zero to project a single lump sum instead. Switch to goal mode to work out how much to put away each month to reach a savings target instead.

Use it as a savings or investment calculator

The same compounding maths drives a savings pot and a long-run investment, so this doubles as an investment calculator. For a savings account, enter the AER and expect a steady, predictable balance. For investments, enter a long-run growth estimate instead of a guaranteed rate: £300 a month at an assumed 7% over 25 years grows to roughly £243,000, of which about £90,000 is your contributions and the rest is growth. Investment returns are not fixed and can fall as well as rise, so treat the projection as a guide, not a promise, and use a cautious rate if you are unsure.

How to use this calculator

  1. Pick a mode: “Grow my savings” to project a balance, or “Reach a goal” to find the monthly amount needed.
  2. Enter your starting amount and, in grow mode, how much you'll add each month.
  3. Set the annual interest rate (use the account's AER) and how many years you'll save for.
  4. Choose how often interest compounds, monthly is the most common for UK savings accounts.
  5. Read your projected balance, the interest earned, and the year-by-year table.

Frequently asked questions

What is compound interest?
Compound interest is interest earned on both your original money and on the interest it has already earned. Because each period's interest is added to the balance, your money grows faster over time than it would with simple interest, an effect often called 'interest on interest'.
How is compound interest calculated?
The standard formula is A = P(1 + r/n)^(nt), where P is your starting amount, r is the annual interest rate (as a decimal), n is how many times a year interest is compounded, and t is the number of years. When you add regular contributions, each deposit also compounds from the moment it's paid in, which is what this calculator works out for you.
Does compounding daily, monthly or yearly make much difference?
It makes a small difference. More frequent compounding earns slightly more because interest starts earning its own interest sooner. Over long periods and higher rates the gap widens, but for most UK savings accounts the headline AER already reflects the effect, so the difference between daily and monthly is usually minor.
Do I pay tax on savings interest in the UK?
Possibly. Most people get a Personal Savings Allowance, £1,000 of interest tax-free for basic-rate taxpayers and £500 for higher-rate taxpayers (additional-rate taxpayers get none). Interest above your allowance is taxed at your income tax rate. Money held in a cash ISA is tax-free regardless. Allowances can change, so check the current figures on GOV.UK.
Is compound interest better than simple interest?
For savers, yes, compound interest grows your balance faster because you earn interest on your accumulated interest, not just your original deposit. Simple interest only ever pays on the starting amount. The longer your time horizon, the bigger the advantage.
How much will £1,000 grow with compound interest?
£1,000 left for 10 years at 5% compounded monthly grows to roughly £1,647 with no further deposits. Add £200 a month and you'd have about £32,700 after 10 years, you'd have paid in £25,000, so roughly £7,700 of that is interest. Use the calculator above to model your own figures.
How do I calculate interest on my savings?
Enter your starting balance, your regular monthly deposit and the interest rate (use the account's AER). The calculator applies compound interest and shows your projected balance for each year.
Can I work out how much to save to reach a goal?
Yes. Switch to goal mode, enter your target amount and how long you have, and it shows the monthly amount you need to save to get there, so it works as a savings goal calculator as well as a growth projection.
Can I use this as a savings goal calculator?
Yes. Switch to goal mode and it works as a savings goal calculator: enter the amount you want to reach and the number of years you have, and it shows the monthly deposit needed to get there, with interest doing part of the work. For example, to reach £10,000 in three years at 4% you would need to save around £262 a month, less than the £278 a month it would take with no interest at all. Adjust the target or the timeline to see the monthly figure change.
How much interest will I earn on my savings?
It depends on your balance, the interest rate (AER) and how long you leave it. £10,000 at 4% compounded monthly earns roughly £407 in the first year with no further deposits, and more in later years as the interest itself starts earning interest. Enter your own balance and rate above for an exact figure.
Can I use this as a savings interest calculator for a lump sum?
Yes. Enter your lump sum as the starting amount, leave the monthly contribution at zero, set the interest rate and term, and the calculator projects how that single deposit grows with compounding, no ongoing saving required.

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Simon Chadwick
About the author
Simon Chadwick
Founder of Orbit Money

Simon is the founder of Orbit Money, a tool that helps people track subscriptions and recurring spend. He builds Orbit's free money calculators and writes about personal finance for UK and Australian readers.

More from Simon →
This tool is a guide, not financial advice.