Calculate how your savings grow with compound interest over time. See the power of compounding with regular contributions.
Source: Bank of England — Interest rates
By Konstantin Iakovlev · Founder, Calks.uk
Last updated: · Verified against HMRC and FCA 2026/27 limits
Rates verified: 28 September 2026
Final Balance after 10 years
£47,526.55
Total Deposits
£34,000.00
Interest Earned
£13,526.55
Growth
39.8%
| Year | Deposits | Interest | Balance |
|---|---|---|---|
| 1 | £12,400.00 | £567.39 | £12,967.39 |
| 2 | £14,800.00 | £1,286.60 | £16,086.60 |
| 3 | £17,200.00 | £2,165.39 | £19,365.39 |
| 4 | £19,600.00 | £3,211.93 | £22,811.93 |
| 5 | £22,000.00 | £4,434.80 | £26,434.80 |
| 6 | £24,400.00 | £5,843.03 | £30,243.03 |
| 7 | £26,800.00 | £7,446.09 | £34,246.09 |
| 8 | £29,200.00 | £9,253.96 | £38,453.96 |
| 9 | £31,600.00 | £11,277.11 | £42,877.11 |
| 10 | £34,000.00 | £13,526.55 | £47,526.55 |
Disclaimer
This calculator is for guidance only. It is not financial or tax advice: check anything you rely on against the official source or a qualified adviser. Rates and figures come from HMRC limits and FCA guidance and are reviewed for the 2026/27 tax year. Everything is calculated in your browser; nothing you enter is sent to our servers.
How It Works
Compound interest means earning interest on both your original deposit and the interest already accumulated. The formula is A = P(1 + r/n)^(nt), where P is the principal, r is the annual rate, n is compounding frequency, and t is time in years. Everything the calculator produces follows from those four inputs, so the deposit, the rate, how often interest is added and how long you leave the money alone are the only levers available to you.
The difference between simple and compound interest grows dramatically over time. A £10,000 deposit at 5% over 20 years grows to £20,000 with simple interest but £26,533 with annual compounding, over £6,500 more purely from interest earning interest. Across shorter periods the gap is modest, which is why compounding feels underwhelming in the first few years and surprising in the last few.
Compounding frequency matters less than most people expect. Take £10,000 at 5% for 30 years. Annual compounding produces £43,219, monthly £44,677, daily £44,812 and continuous compounding £44,817, so the entire distance from yearly to daily is 3.7%. Over 10 years the same 5% on £10,000 gives £16,470 compounded monthly against £16,289 compounded annually. The rate does far more work than the frequency. Most UK savings accounts compound annually or monthly, while credit card balances compound daily, and this calculator supports daily, monthly, quarterly and annual compounding, with any regular contributions added monthly.
AER, the Annual Equivalent Rate, is the number to compare savings accounts on, because it folds compounding into a single annual figure. A 5% gross rate paid monthly works out at 5.12% AER, slightly better than 5% paid once a year, and a comparison based on headline rates alone would miss that. Borrowing uses different labels. APR shows the cost of a loan including fees, EAR is the equivalent for credit with compounding built in, and APRC is the mortgage version. Comparing an AER against an APR tells you nothing useful.
Time does more than the size of the deposit. £10,000 growing at 7% reaches £19,672 after 10 years, £38,697 after 20, £76,123 after 30 and £149,745 after 40. The first decade adds £9,672 to the pot. The last decade adds £73,622. Regular saving behaves the same way, and £100 a month at 7% from age 25 builds £262,000 by 65, while starting at 35 gives £122,000 and starting at 45 gives £52,000. At 7%, once a plan has run 30 years, growth accounts for just over 70% of the final balance rather than the money paid in.
The Rule of 72 gives a quick sense of scale without any formula at all. Divide 72 by the annual rate and the answer is roughly the number of years for money to double. At 6% that is 12 years, at 8% about 9 years, and at 10% around 7.2 years. The approximation holds up well for rates between 4% and 15%, which covers almost every savings or investment assumption anyone uses in practice.
Nominal growth flatters. That £43,219 after 30 years at 5% is worth £17,806 at present-day prices once 3% average inflation is taken out, which is well under half the headline balance. Cash paying 3% while inflation runs at 4% loses purchasing power every year, even though the statement balance keeps rising. Judging a savings plan on the real return rather than the nominal figure is the only way to see whether the money is actually growing.
Example: £10,000 at 4.5% for 10 years, annual compounding, no monthly contributions
- Year 1: £10,000 × 1.045 = £10,450.00
- Year 5: £10,000 × 1.045⁵ = £12,461.82
- Year 10: £10,000 × 1.045¹⁰ = £15,529.69
- Total interest earned: £5,529.69
- Simple interest comparison: £4,500.00 (£1,029.69 less)
- Monthly compounding at the same rate would give £15,669.93
Source: Bank of England — Interest rates
Frequently Asked Questions
- Does it matter whether interest is paid monthly or yearly?
- Less than the headline rate does. A 5% gross rate paid monthly is equivalent to 5.12% AER, which is why AER is the figure to compare accounts on. On £10,000 over 10 years at 5%, monthly compounding produces £16,470 against £16,289 compounded annually. That is a real but small advantage, and it should not persuade you to accept a lower rate in exchange for more frequent interest.
- How long does it take to double my money at a given rate?
- Divide 72 by the annual rate and you have a close approximation in years. At 6% money doubles in about 12 years, at 8% in about 9 years, and at 10% in roughly 7.2 years. The shortcut is accurate enough for rates between 4% and 15%, and it is a fast way to sanity-check a projection before running the full calculation.
- Why does starting ten years earlier make such a difference?
- Because the earliest contributions have the longest to compound. Saving £100 a month at 7% from age 25 builds £262,000 by 65. The same £100 a month started at 35 reaches £122,000, and from 45 only £52,000. The pattern shows up with lump sums too: £10,000 at 7% gains £9,672 in its first decade but £73,622 in its fourth. Delay costs growth, not just contributions.
- Will compound interest keep up with inflation?
- Only if the rate beats it. £10,000 at 5% for 30 years reaches £43,219 with annual compounding, but at 3% average inflation that buys what £17,806 buys today. When cash pays 3% and inflation runs at 4%, the balance rises while purchasing power falls, which is the trap of judging savings on the nominal figure alone. Comparing the rate against expected inflation before you commit is more useful than comparing accounts against each other.