Compound interest calculator (UK)
See what compounding does to your money — and how much of the balance is interest rather than what you paid in.
Calculator
Your compound interest, and the working behind it
What it grows to
After 10 years of compounding monthly, the balance is
£38,523.31
This is not a forecast. It is what 5% a year would produce if it held exactly, every month, for the whole term. Real returns and real rates move; this is arithmetic on the assumption you typed.
| Starting amount | £5,000.00 |
|---|---|
| Deposits over the term | £24,000.00 |
| Interest earned | £10,038.71 |
| Charges taken off the balance | −£515.40 |
| Final balance | £38,523.31 |
Deposits are £200.00 a month, so the deposits line is what left your bank account — not what it is worth now.
How much of that is interest
Of the £38,523.31 above, £29,000.00 is money you put in — the starting amount plus every deposit — and £10,038.71 is interest.
Over 10 years the interest does not overtake the money you paid in. It is a slower crossing than most people expect, and a longer term or a higher rate is what moves it — try both above.
The 0.25% annual charge costs £619.59 over the term. That is not the same as the charges column, which totals £515.40: money taken out early would have gone on compounding, and the difference between the two figures is the interest it never earned.
When it reaches your target
The balance first reaches £25,000.00 at the end of year 7, closing that year at £26,793.03. You can find that year in the schedule below.
Year by year
| Year | Opening | Deposits | Interest | Charges | Closing | Interest to date |
|---|---|---|---|---|---|---|
| 1 | £5,000.00 | £2,400.00 | £314.18 | £16.13 | £7,698.05 | £314.18 |
| 2 | £7,698.05 | £2,400.00 | £448.93 | £23.04 | £10,523.94 | £763.11 |
| 3 | £10,523.94 | £2,400.00 | £590.05 | £30.29 | £13,483.70 | £1,353.16 |
| 4 | £13,483.70 | £2,400.00 | £737.86 | £37.90 | £16,583.66 | £2,091.02 |
| 5 | £16,583.66 | £2,400.00 | £892.70 | £45.83 | £19,830.53 | £2,983.72 |
| 6 | £19,830.53 | £2,400.00 | £1,054.84 | £54.15 | £23,231.22 | £4,038.56 |
| 7 | £23,231.22 | £2,400.00 | £1,224.68 | £62.87 | £26,793.03 | £5,263.24 |
| 8 | £26,793.03 | £2,400.00 | £1,402.57 | £72.01 | £30,523.59 | £6,665.81 |
| 9 | £30,523.59 | £2,400.00 | £1,588.89 | £81.59 | £34,430.89 | £8,254.70 |
| 10 | £34,430.89 | £2,400.00 | £1,784.01 | £91.59 | £38,523.31 | £10,038.71 |
10 years, rolled up from monthly periods. The CSV export below contains every period rather than only the year ends.
What the compounding interval is actually worth
Each row is the same £5,000.00 left alone for 10 years at 5%, compounded at a different interval, with no deposits and no charge. The deposits are removed on purpose: they are paid per period, so changing the interval would change how much money goes in as well as how often it compounds, and the comparison would no longer be about compounding.
| Compounded | Balance after 10 years | Interest | Against annual |
|---|---|---|---|
| Annually | £8,144.48 | £3,144.48 | — |
| Quarterly | £8,144.44 | £3,144.44 | -£0.04 |
| Monthly | £8,144.47 | £3,144.47 | -£0.01 |
On an effective rate the interval is worth -£0.01. That is not a bug in the arithmetic — it is what an effective annual rate means. The periodic rate is (1 + r) ^ (1 / n) − 1, so however many times a year it is applied, a year of it compounds back to exactly the 5% you typed, and only per-period rounding to whole pence separates the rows. An account quoting an AER pays the same AER whether it credits interest monthly or yearly, which is precisely why the AER is defined that way.
There is no daily or weekly option, and that is deliberate rather than missing. The engine offers monthly, quarterly and annual periods: a daily schedule over a 30-year term is nearly 11,000 rows that no table can show and no reader would check, and on an effective rate the answer it produces differs from the annual one by rounding. Where a daily figure genuinely differs — a nominal rate — the gap between monthly and annual above already shows the size and direction of the effect.
A worked example you can check
These are the figures the calculator above loads with, so every number in this section can be checked against it without typing anything. £5,000.00 to start, £200.00 a month added at the start of each month, 5% a year as an effective rate, compounded monthly, with a 0.25% annual charge, over 10 years.
| Starting amount | £5,000.00 |
|---|---|
| Deposits over 10 years | £24,000.00 |
| Interest earned | £10,038.71 |
| Charges taken off the balance | −£515.40 |
| Final balance | £38,523.31 |
Four things in that table are worth pausing on, and every one of them is a convention or a mechanism rather than arithmetic anyone could argue with.
- £29,000.00 of the final balance is money out of your bank account — the starting amount plus every deposit — and £10,038.71 is interest. Over 10 years the interest does not overtake the deposits: at this rate and this term the money you pay in is still doing most of the work, which is the part a single headline figure hides.
- The interest in the last year is far larger than the interest in the first — £314.18 in year 1 against £1,784.01 in year 10, at the same 5% throughout. Nothing about the rate changed. It is being applied to a balance that earlier interest has already grown, which is the whole of what “interest on interest” means.
- Compounding monthly instead of annually is worth -£0.01 here, on £5,000.00 left alone for 10 years. That is not a mistake: 5% is entered as an effective rate, so twelve monthly applications of it compound back to exactly 5% and only rounding to whole pence separates the two. Enter the same figure as a nominal rate and the same comparison is worth £90.64 instead — which is the difference between the two bases, not a difference between two ways of counting months.
- The 0.25% charge costs £619.59, while the charges column totals only £515.40. The gap is the interest the charged money never went on to earn. A charge is not only what it takes; it is what it takes plus everything that money would have compounded into.
And the question everyone actually arrives with: at 5% with no deposits and no charge, £5,000.00 first reaches £10,000.00 at the end of year 15. The familiar shortcut — 72 divided by the rate — gives 14.4, which is close, and the engine scans a real schedule instead of taking its word for it.
What the same money bought, over the same lengths of time
The calculator above projects growth. It says nothing about what the money will buy, and that is the other half of the question. For scale, here is what happened to prices over the last thirty, twenty and ten years — measured, not assumed.
| Period | £10,000.00 in | Would be | Prices rose by |
|---|---|---|---|
| 30 years | 1995 | £20,595.24 | 106.0% |
| 20 years | 2005 | £17,720.87 | 77.2% |
| 10 years | 2015 | £13,840.00 | 38.4% |
This is what prices did, not what they will do. None of it is fed into the calculator and none of it is a forecast: the growth rate above is your assumption, and so is any inflation you want to net off it. Thirty years of history is not a prediction of the next thirty, and a page that quietly used it as one would be dressing a guess as a statistic.
Source: Office for National Statistics licensed under the Open Government Licence v3.0. Consumer Prices Index, all items (CPI INDEX 00: ALL ITEMS 2015=100), annual averages 1988 to 2025. Released 2026-07-21; latest monthly observation 2026 JUN. The series at the Office for National Statistics.
Methodology: exactly what this calculator does
What the calculator does, period by period
There is one loop and it is the only place money moves. For each period, in this order: open with the previous closing balance; add the deposit if you chose the start of the period; apply that period’s interest; deduct the charge; add the deposit if you chose the end of the period; close. Every figure is a whole number of pence and every row satisfies opening + deposit + interest − charge = closing exactly. The final balance is the last row’s closing figure and nothing else — no closed-form formula is evaluated alongside it, so the headline cannot disagree with the table.
Turning an annual rate into the rate for one period
Your annual rate is converted exactly once. On the effective basis the periodic rate is (1 + r) ^ (1 / n) − 1, so n of them compound back to precisely the rate you typed. On the nominal basis it is r / n, which compounds to more. A savings account’s AER and a fund’s quoted return are effective rates; mortgage and loan APRs are nominal. This page offers the choice rather than making it quietly, because the two answer different questions and the difference is priced on your own figures in the breakdown above.
This is also why “compounded daily” is worth less than it sounds. If the rate you have been quoted is an AER, the compounding interval has already been priced into it — that is what the AER is for — and changing the interval changes the answer by rounding alone. If the rate is nominal, the interval genuinely matters, and the table above shows by how much on your figures.
One period governs three things
The engine models a single period type, so the interval you choose sets how often interest is added, how often you deposit and how often the charge is taken, all together. Monthly deposits into annually-compounded interest cannot be expressed here, and this page does not pretend otherwise with a second selector that would quietly govern something else. There is no daily or weekly option for the same reason it is absent from the engine: a daily schedule over a 30-year term is nearly 11,000 rows that no page can show and no reader can check, and a projection over decades is dominated by whether the rate assumption holds rather than by the interval.
The charge
The charge is taken off the balance and appears in the charges column, at the annual rate divided by the number of periods in the year — a fee schedule is a tariff, not a compounding return, so it divides nominally. It cannot take money that is not there: the balance floors at zero rather than going negative. A charge levied inside a fund behaves differently, because it reduces the return instead of appearing as a deduction; the investment calculator models that case, along with capped platform fees and flat account fees.
Rounding
Rounded to whole pence at every period boundary. The alternative — carrying fractions and rounding only for display — gives a table whose rows visibly do not add up. The cost is a drift of a pound or two against the textbook formula over a long monthly schedule, which is a far smaller problem than a table a reader can catch out, on a calculation whose rate is an assumption in the first place.
Reaching a target
“Which year does it reach £X” is answered by scanning the year-ends of a real schedule and reporting the first year the balance meets the target, rather than by rearranging a formula. That matters when the rate is negative or the charge outweighs the interest: a balance can cross a target and come back down, and first crossing is the honest reading of the question. If no year inside a century reaches it, the answer says so and by how much — the search never hands back its own ceiling as though it were the answer.
Sources, and why there is no rates table
Every tax calculator on this site cites gov.uk, because it implements statutory rates, bands and thresholds that can be checked against a published source. This one has no statutory figures at all. The interest rate, the deposits, the charge and the term are all yours. There is nothing here an authority could confirm, because an interest rate assumption is not the sort of thing that can be correct.
So this page carries no verification stamp and will not borrow one. The claim it makes is arithmetic only: given these inputs and the conventions stated above, the schedule is what they compound to, every row reconciles exactly, and every headline figure is read off it.
What this is not
It is not a forecast. A single path at a constant rate says nothing about the spread of real outcomes: savings rates change, investment returns arrive as a sequence, and the order they arrive in changes the answer. It models no tax — interest can be taxable, and none of that is applied here — and no ISA or pension allowance, no bonus rate expiring after twelve months, and no inflation. And it is information, not advice: it cannot know your circumstances and it is not a recommendation to save or invest in anything.
Every calculation runs in your browser. There is no application server and no database, so nothing you type is transmitted or stored. A share link is the exception: it carries your figures in the URL. What that means.
Frequently asked questions
- How does compound interest actually work?
Interest is added to your balance, and the next period's interest is worked out on the new, larger balance — so you earn interest on interest already earned. On this calculator's defaults (£5,000.00 to start, £200.00 a month, 5% a year) the interest credited in year 1 is £314.18 and in year 10 it is £1,784.01. The rate never changed; the balance it applies to did. The year-by-year table above shows every step of that.
- Does compounding monthly beat compounding annually?
It depends entirely on which kind of rate you were quoted, and that is the question most calculators skip. If your rate is an effective one — an AER, or a fund's quoted annual return — then the compounding interval is already priced into it, and changing the interval is worth -£0.01 on the defaults above: essentially nothing, because twelve monthly applications of an effective rate compound back to exactly the rate you typed. If your rate is a nominal one, divided rather than rooted, the same comparison is worth £90.64. Both figures come from running the calculation, not from a rule of thumb.
- How long does it take to double my money?
At 5% a year with no deposits and no charge, £5,000.00 first reaches £10,000.00 at the end of year 15. The familiar shortcut is to divide 72 by the rate, which gives 14.4 years here — close enough for mental arithmetic, and the answer above comes from scanning a real schedule rather than from the shortcut. Change the rate above and the "I want to reach" box will re-answer it on your own figures.
- What is the difference between an effective rate and a nominal rate?
An effective annual rate compounds to exactly itself over a year: the rate for one period is (1 + r) ^ (1/n) − 1. A nominal rate is simply divided by the number of periods, so compounding it back gives more than the rate you started with. UK savings accounts quote AER, which is an effective rate, precisely so that accounts crediting interest at different intervals can be compared. On the defaults above, treating the rate as nominal instead of effective adds £272.59 to the final balance — an increase produced by the convention, not by anything happening to your money.
- Why is there no daily compounding option?
Because the engine behind this page models monthly, quarterly and annual periods, and adding a daily one would buy accuracy that does not exist. A daily schedule over a 30-year term is nearly 11,000 rows that no table can show and no reader can check. More to the point, if your rate is an AER the interval barely changes the answer at all, and if it is a nominal rate the gap between monthly and annual shown on this page already tells you the size and the direction of the effect.
- Does this account for tax on the interest?
No. No tax of any kind is applied: the balance compounds gross, and interest outside a tax-free wrapper can be taxable depending on your circumstances. Nor does it model ISA or pension rules, a bonus rate that expires after twelve months, or inflation. Treat the figure as what the arithmetic gives before any of that, and check anything that turns on tax against gov.uk or an accountant.
- Is this a prediction of what I will actually have?
No. It computes what would happen if one rate held exactly, every single period, for the whole term. Savings rates move, investment returns arrive as a sequence rather than as an average, and the order they arrive in changes the outcome. Treat the number as arithmetic on an assumption you supplied, not as a forecast — its usefulness is in comparing two plans, not in predicting a balance.
- Is anything I type here sent anywhere?
Not by typing it. The calculation runs entirely in your browser, there is no application server and no database, and the share link and CSV export are both assembled in the tab you are reading this in — creating a link makes no request at all. The one exception is worth knowing: a share link puts your figures in the URL, so if you send one and somebody opens it, their browser requests that address and the figures travel with it, the way any web address does. Nothing is stored either way.