Compound Interest Calculator

Estimate how regular contributions and compound growth could change your balance over time. Compare an ISA, pension or taxable account using your own assumptions.

How compound growth works

Compound growth means each new period can earn a return on both the money deposited and growth already added. Time, regular contributions and the assumed rate usually have a larger effect than the exact compounding frequency.

Savings interest and investment returns

A savings rate is normally stated as interest, while investments are often modelled using an expected return. Savings returns may be more predictable, but investment returns are uncertain and the value can fall as well as rise.

ISA, pension and taxable accounts

Interest and gains inside an ISA are generally sheltered from UK Income Tax and Capital Gains Tax. Pension investments normally grow within the pension wrapper, but access and withdrawal tax rules apply. A taxable savings account may create Income Tax where interest exceeds the relevant allowances.

Worked examples

Building a longer-term fund

Enter a £10,000 starting balance, £200 monthly contribution, 5% annual growth and 20 years to see how much of the projected balance comes from deposits and how much comes from growth.

Saving for a five-year goal

Use a shorter time period and a savings rate rather than an investment-return assumption where the money is needed on a fixed date.

How we calculate this

The calculator adds the selected periodic growth to the current balance, then adds the regular contribution for that period.

Deposits and projected growth are tracked separately so the result shows how much money was contributed.

For a taxable account, the estimate applies the selected taxpayer band's Personal Savings Allowance to interest in each modelled year. It does not model changing tax bands or investment Capital Gains Tax.

Official sources

FAQs

Is compound interest guaranteed?

No. A fixed savings account may offer a stated rate for a set period, but variable savings rates can change and investment returns are never guaranteed.

Does the calculator include inflation?

No. The result is shown in future pounds and does not reduce the balance to reflect the future buying power of money.

Does the pension option include tax relief?

No. It models growth inside the pension only. Pension tax relief, annual allowance rules and tax on withdrawals need to be considered separately.

Why does compounding frequency matter?

More frequent compounding adds growth to the balance sooner. The difference is often smaller than the effect of the rate, contribution and time period.

Money

Save vs Invest

Compare saving and investing for risk, access, inflation and long-term growth.

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Read the full comparison

Saving protects capital and works best for short-term goals. Investing offers higher long-term growth potential but comes with volatility and loss risk. Most people need both: cash for emergencies and near-term plans, investments for longer-term wealth building.

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