CalculatorsCompound interest
Compound interest calculator
See how a UK savings or investment balance grows with regular contributions and compounding interest.
Your numbers
Tell us about your savings
Show the final balance in today's money.
Projected final balance
£32,703
Your money could earn £7,703 in interest. About 24% of your final balance came from growth, not your own contributions.
- Term
- 10 years
- Contributed
- £25,000
- Interest earned
- £7,703
- Projected final balance
- £32,703
Year-by-year breakdown
| Year | Contributions | Interest | Balance |
|---|---|---|---|
| 1 | £2,400.00 | £106.93 | £3,506.93 |
| 2 | £2,400.00 | £235.19 | £6,142.13 |
| 3 | £2,400.00 | £370.01 | £8,912.14 |
| 4 | £2,400.00 | £511.73 | £11,823.87 |
| 5 | £2,400.00 | £660.70 | £14,884.58 |
| 6 | £2,400.00 | £817.29 | £18,101.87 |
How it works
What compound interest actually does
Compound interest is interest calculated on your growing balance, not just on what you first put in. Each time interest is added, it becomes part of the balance, so the next round of interest has a slightly bigger number to work with. Over enough time, that small difference adds up to a large one.
This calculator adds your contributions and interest together, month by month, for the whole period you choose, rather than jumping straight to an answer with a single formula. That's what makes it accurate even when you pay in monthly but interest only compounds annually, or any other mismatched combination.
Trying to work out what your savings account could be worth? Use the savings calculator →
The method
Why a simulation instead of a formula
Most compound interest calculators use one equation that jumps straight from your starting numbers to a final balance. That works when your contribution and compounding frequencies match. It gets unreliable when they don't.
Show the technical explanation and formula
Instead, Calcular simulates your balance one month at a time. Every month it does two things, in order: first it adds interest to whatever balance carried over from the month before, then — if a contribution is due that month — it adds the contribution. A contribution never earns interest in the same period it was paid in; it starts earning from the next compounding date. This is known as an ordinary annuity, and it matches how most real savings and investment accounts actually credit interest.
The interest step, applied every month a contribution isn't:
balance = balance × (1 + periodic rate)
The periodic rate depends on your compounding frequency. An annual rate of 5% compounded monthly, for example, uses a periodic rate of 5% ÷ 12 each month. For quarterly or annual compounding, that growth step only happens on the compounding date; balances sit unchanged between them, exactly as a fixed-term or annually-credited account behaves.
Worked example
£1,000 to start, £200 a month, 5% a year
Say you open an account with £1,000, add £200 every month, and it earns 5% a year, compounded monthly, for 10 years.
- You pay in
- £25,000.00
- Interest earned
- £7,703.47
- Final balance
- £32,703.47
Just over a quarter of that final balance — nearly £7,700 — came from interest alone, without you doing anything beyond making the same £200 deposit each month. That's the effect compounding has over a decade.
Good to know
What this calculator does, and its limits
What it does
Simulates a savings or investment balance month by month, using the interest rate, contribution amount and frequencies you enter, so you can see how the balance and its make-up of contributions vs. interest change over time.
Assumptions
- Assumes a constant interest rate for the whole period. Real rates and returns change over time.
- Doesn't include tax, fees, charges, or contribution limits (like ISA allowances) unless you build them into the rate or contribution amount yourself.
- Assumes every contribution is paid in full, on time, with no withdrawals.
- Daily compounding uses an average month length rather than exact calendar dates. The effect on your result is negligible.
Not financial advice. This is a general information tool, not a personal recommendation. Speak to a regulated financial adviser before making significant savings or investment decisions.
FAQ
Common questions
What is compound interest?
Compound interest is interest calculated on your total balance, including any interest already added, not just on your original deposit. Each round of interest makes the balance a little bigger, so the next round of interest has more to work with. This is different from simple interest, which is always calculated on the original amount only.
How often does interest compound?
It depends on the account or investment. Some savings accounts compound daily, some monthly, and some annually. The compounding frequency is set by the provider, not by you, but you can usually find it in an account's terms or key facts document. This calculator lets you try daily, monthly, quarterly, or annual compounding to see how much difference it makes.
Does monthly compounding make a difference compared to annual?
Yes, though usually a smaller one than people expect. At the same nominal interest rate, more frequent compounding produces a slightly higher final balance, because interest starts earning its own interest sooner. The effect grows with higher interest rates and longer time periods, but for typical savings rates over a few years it's often a modest difference. Try switching the compounding frequency above to see it for your own numbers.
What happens if I add money every month?
Regular contributions usually matter far more to your final balance than the compounding frequency does. Each contribution starts earning interest from the next compounding date, so contributing consistently — even small amounts — adds up significantly over a long period, on top of whatever your starting balance grows into on its own.
Is compound interest guaranteed?
No. This calculator assumes a constant interest rate for the whole period you enter, but real savings rates can change, and investment returns can go up or down, including into negative territory. Treat the results as an illustration of how compounding works at a given rate, not a promise of what you'll actually receive.
Is this calculator financial advice?
No. Calcular is a general information tool, not financial advice, and nothing here should be treated as a personal recommendation. It doesn't know your full financial situation, tax position, or goals. If you're deciding where to put a significant amount of money, it's worth speaking to a regulated financial adviser.
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