Compound interest and savings calculator
Three numbers: how much you start with, what rate it earns, and for how long. That is the question most people arrive with, and it is all this asks for.
Monthly deposits, how often the interest is added, and inflation are under More options, closed, because most people do not need them and a form that demands them turns people away.
This one runs on your own device. It is worked out in your browser, so there is nothing to send and nothing to log. Where a tool on this site does send something out, that page says so and names where it goes.
The formula, and the one number that replaces it
Compound interest has a short formula and a long reputation. The short version, for a lump sum left alone:
| Symbol | Means |
|---|---|
A | what you end up with |
P | what you started with |
r | the quoted annual rate, as a decimal |
n | how many times a year the interest is added |
t | the number of years |
Then
A = P × (1 + r ÷ n)n t.
Why the compounding frequency matters less than you think
The n in that formula does one job: it turns the
rate you were quoted into the rate you actually get. 5% added once a year
is 5% a year. The same 5% added every month is
5.12% a year, because the interest starts earning
interest sooner. That real figure has a name — the
AER, or effective annual rate — and UK savings
accounts are required to quote it precisely so that two accounts can be
compared in one number.
So this calculator works out your AER first and shows it to you. After that, the compounding frequency has nothing left to do. Daily compounding at 5% is 5.13% a year, which is a penny on every twenty pounds more than monthly — worth knowing, and not worth agonising over.
How much of it is yours and how much the interest made
The single most useful thing a savings calculator can tell you is not the total. It is how that total divides: the money you put in, which you already had, and the money the interest made, which you did not. Early on almost all of it is yours. The point of compounding is that this stops being true, and the reading above names the year it stops — the first year in which the interest earns more than you paid in.
On a long enough run the interest overtakes the deposits entirely, and that crossover is the whole argument for starting early, stated as a date rather than a slogan.
Why this asks for three numbers and not ten
Most calculators for this want the lot before they will say anything: principal, contribution, contribution frequency, compounding frequency, tax rate, inflation rate, and whether the deposit lands at the start or the end of the period. Every one is a real thing. Three of them are the question most people came with.
A form that demands all ten is a form that works perfectly and sends people away. So the three that answer the question are always visible, the rest are one click away, and the answer appears whether or not you ever open them.
Where to go next
The same arithmetic, pointed the other way:
- loan and mortgage calculator — what it costs when the interest runs against you
- SIP calculator — and what a monthly contribution does over years
What this does not do
It is arithmetic, not advice. It cannot tell you what you can afford to save, what rate you will be offered, or whether an account is a good one. It assumes a fixed rate for the whole term, which almost no savings account has — most pay a bonus rate for a year and then quietly stop.
Tax is not modelled. Interest above your Personal Savings Allowance is taxable, and an ISA is not. Deposits are treated as arriving at the end of each month, which is the cautious assumption: paying in on the 1st rather than the 31st earns slightly more than shown.
It is not an investment return. A savings rate is contractual; a market return is not, and running 7% for thirty years in a straight line describes nothing that has ever happened to anybody.
There is no annual step-up here: the monthly deposit is the same every month for the whole term. If you increase what you pay in each year, which most people do as their pay rises, the SIP calculator takes a step-up percentage and compounds against it.