Compound interest calculator

How it works

Compound interest means you earn interest on your interest. Each time interest is added, it becomes part of the balance, so the next lot of interest is a little bigger. Over a long time, that snowball does a lot of the work.

Choose monthly if your account adds interest every month, which many easy-access accounts do, or yearly if it pays once a year. Monthly compounding grows slightly faster at the same rate.

Worked example

£1,000 left at 5% a year, with interest added yearly, grows to about £1,629 after 10 years without you adding a penny. That's £629 of interest, and about £129 of it is interest earned on earlier interest.

Frequently asked questions

What is AER?

AER, the annual equivalent rate, is the rate shown on UK savings accounts. It already includes the effect of compounding over a year, so you can compare accounts fairly whether they pay monthly or yearly.

Do I pay tax on the interest?

Most people can earn some savings interest tax-free under the Personal Savings Allowance, and interest in a cash ISA is always tax-free. This calculator shows interest before any tax.

Will my rate stay the same?

Rarely. Easy-access rates change often, and many top rates include a bonus that ends after a set time. Our savings rates page shows which of this week's rates hold for a full year.