Compound Interest Calculator
See how a lump sum and regular saving grow with compound interest, or switch to work out how much to save each month to reach a goal.
Your savings
Interest is added monthly. Savings interest above your Personal Savings Allowance (£1,000 basic rate, £500 higher rate) is taxable unless it is in an ISA. From April 2027 under-65s can put up to £12,000 a year in cash ISAs.
The compound interest formula
Balance = P × (1 + r)ⁿ + monthly deposit × ((1 + r)ⁿ − 1) ÷ r
Here P is your starting amount, r is the monthly interest rate (annual rate ÷ 12) and n is the number of months.
Why starting early matters
Saving £200 a month at 5% for 10 years grows to about £31,000, of which around £7,000 is interest. Keep going for 30 years and it reaches about £166,000, with over £94,000 of it interest. Time does most of the work.
Saving for a goal
Choose How much to save above and enter your target, what you have now and your deadline. For example, a £20,000 house deposit in 3 years, starting from £2,000 at 4% interest, needs about £465 a month, around £107 a week. Without any interest it would be £500 a month.
Sources
Figures are checked against these official sources. Last reviewed 7 November 2026.
Common questions
What is compound interest?
Compound interest means you earn interest on your interest. Each month the interest is added to your balance, so the next month’s interest is worked out on a bigger amount.
What is AER?
AER (annual equivalent rate) shows what you would earn in a year including compounding. It lets you compare accounts that pay interest monthly or yearly.
Is savings interest taxed?
Interest is taxable above your Personal Savings Allowance: £1,000 for basic-rate taxpayers, £500 for higher-rate and £0 for additional-rate. Interest in an ISA is always tax-free.
How much can I put in an ISA?
The ISA allowance is £20,000 a year across all your ISAs. From 6 April 2027, if you are under 65, no more than £12,000 of that can go into cash ISAs; the rest can go into stocks and shares ISAs.
How much should I save each month?
A common guide is 20% of take-home pay for savings and paying off debt. For a specific goal, choose How much to save and the calculator works out the monthly amount, taking off the interest you will earn along the way.
What is a Lifetime ISA?
A Lifetime ISA lets 18 to 39 year olds save up to £4,000 a year for a first home or retirement, with a 25% government bonus of up to £1,000 a year.
What is the rule of 72?
Divide 72 by the interest rate to estimate how many years it takes to double your money. At 6% that is about 12 years.