See how your savings grow over time with compound interest and regular monthly contributions.
Rates as of Q2 2025 (example)
A compound interest calculator shows how a sum of money grows over time when interest is earned not just on your original investment, but also on the interest already added — plus the effect of adding regular monthly contributions. Over long periods, compounding can turn modest regular savings into a substantial balance, as each month's interest is calculated on a growing base.
This calculator compounds interest monthly: each month, interest is calculated on the current balance and added to it, then the monthly contribution is added on top — so next month's interest is calculated on a balance that includes both the previous interest and contribution.
Formula: Each month: Balance = Balance × (1 + monthly rate) + Monthly Contribution, where monthly rate = Annual Rate ÷ 12 ÷ 100. This repeats for the total number of months (years × 12).
Example: Starting with a £10,000 initial investment, adding £200 per month, at a 5% annual interest rate (example rate — enter your expected rate) compounded monthly over 20 years, the balance grows to roughly £109,000. Of that, about £58,000 comes from your contributions (£10,000 initial plus £48,000 in monthly contributions over 20 years), and about £51,000 is interest earned through compounding. (Note: all figures in this example are for illustration purposes only and are not guaranteed.)
Compound interest is the foundation of long-term saving and investing — the longer your money has to grow, the larger the share of your final balance comes from compounding rather than your own contributions, as shown in the example above. In the UK, interest earned on savings outside of a tax-free wrapper counts toward your Personal Savings Allowance, beyond which it may be subject to Income Tax — many savers use Individual Savings Accounts (ISAs), such as Cash ISAs or Stocks & Shares ISAs, to shelter interest or investment growth from tax up to the annual ISA allowance. This calculator shows the growth of your balance before considering tax, so your actual after-tax growth may be lower depending on where the money is held (example consideration — see the ISA Calculator for tax-efficient savings).
Simple interest is calculated only on the original amount you invest, so it grows by the same amount each period. Compound interest is calculated on the current balance — including previously earned interest — so the amount of interest earned grows over time, even if the rate stays the same.
This calculator compounds interest monthly. Each month, interest is added to the balance based on the current balance, and then the monthly contribution (if any) is added on top, so the next month's interest is calculated on this new, larger balance.
No — the default is an example only. Interest rates vary significantly depending on whether you're looking at a savings account, Cash ISA, or investment account, and rates change over time. Enter a rate that reflects your actual account or a realistic expected return for investments.
No. This calculator shows growth before tax. In the UK, interest earned outside of a tax-free wrapper (like an ISA) may be subject to Income Tax beyond your Personal Savings Allowance. Holding savings in an ISA can shelter interest from tax up to the annual ISA allowance.
Because each month's interest is calculated on a balance that includes all previously earned interest, the amount of interest earned each month increases over time — this compounding effect accelerates as the balance grows, which is why long time horizons are particularly valuable for compound growth.
This calculator assumes monthly contributions. If you contribute less frequently (e.g., annually), you could approximate it by dividing your annual contribution by 12 and entering that as a monthly figure, though the actual compounding pattern would differ slightly from a true monthly-contribution scenario.
Disclaimer: The information, rates, and figures provided on this page are for educational and illustrative purposes only and do not constitute financial advice or a guarantee of investment returns. The default interest rate is a sample value and does not reflect rates currently available from any specific account or investment. Investment returns can go down as well as up, and past performance is not a reliable indicator of future results. Always consult a qualified financial adviser before making investment decisions.