Overview
This compound interest calculator shows how your savings or investments could grow over time. Enter a starting amount, a regular monthly contribution, an expected annual interest rate and the number of years, and we'll project the future value — splitting out how much you put in versus how much is earned through compounding. Compounding is "interest on your interest": each year's growth itself earns growth the following year, which is why pots accelerate the longer you leave them. Adjust the figures to see the powerful effect of time and regular saving.
How it's calculated
Compound interest means you earn returns not just on your original money, but also on the returns already added. We project this month by month:
- Apply growth to the current balance (at your rate and chosen compounding frequency).
- Add your monthly contribution.
- Repeat for every month of the term.
Total contributed is your starting amount plus all your monthly payments; everything above that is interest earned.
FV = P(1 + r)^n + PMT × [((1 + r)^n − 1) ÷ r]
Where FV = future value, P = starting amount, PMT = regular contribution, r = periodic rate and n = number of periods. We convert your annual rate to the chosen compounding frequency.
Worked example
Start with £5,000, add £200 a month, earn 5% a year (compounded monthly) for 10 years:
| Starting amount | £5,000 | |
|---|---|---|
| Monthly contribution | £200 | |
| Total contributed | £29,000 | over 10 years |
| Interest earned | ≈ £10,290 | |
| Future value | ≈ £39,290 |
You'd put in £29,000 and end up with about £39,290 — roughly £10,290 of growth, purely from compounding. Leaving it longer would widen that gap dramatically.
Current rates & key facts
UK savings & tax context (2026/27)
| Item | Detail |
|---|---|
| Bank of England base rate | 3.75% (June 2026) |
| Personal Savings Allowance | £1,000 tax-free interest (basic rate); £500 (higher rate); £0 (additional) |
| ISA allowance | £20,000 per tax year — interest is completely tax-free |
Returns are not guaranteed — this is an illustration using a fixed rate. Real savings rates change and investment values can fall as well as rise. Using an ISA shelters interest from tax.
Last updated 28 June 2026 · Source: GOV.UK — Tax on savings interest