Compound Interest Calculator
Enter a starting amount, optional monthly contribution, annual interest rate and time period to see what your savings grow to — and how much of it is pure interest.
How it works
Compound interest pays interest on your interest: a balance grows by factor (1 + r/12) every month at annual rate r with monthly compounding. £10,000 at 5% becomes £16,470 in 10 years — £6,470 of it interest.
Regular contributions compound too: each monthly deposit starts earning from the month it lands. £200 a month at 5% for 10 years turns £24,000 of deposits into about £31,056.
Time matters more than rate: money doubling takes about 72 ÷ rate years (the rule of 72). Starting ten years earlier routinely beats finding a slightly higher rate — which is the whole argument for starting now.
FAQ
How does compound interest actually work?
Each period's interest is added to the balance, and the next period's interest is calculated on that larger balance. At 5% compounded monthly, £10,000 earns £41.67 the first month, slightly more the second, and so on — reaching about £16,470 after 10 years without any further deposits.
What is the rule of 72?
A quick estimate of doubling time: divide 72 by the annual interest rate. At 6% your money doubles in roughly 12 years; at 4%, roughly 18. It is an approximation that works best for rates under about 15% and instantly shows why small rate differences compound into large gaps over decades.
Is interest on savings taxable in the UK?
Interest outside an ISA counts as income: basic-rate taxpayers get a £1,000 Personal Savings Allowance, higher-rate £500, additional-rate none. Inside a cash or stocks & shares ISA, interest and growth are entirely tax-free — one reason to use your ISA allowance first.