Compound Interest Calculator
Enter a starting amount, regular contributions and an interest rate to see how your money grows over time — and how much of the final balance is pure interest.
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Results are illustrative only. Does not account for tax, inflation, or variable rates. Past rates do not guarantee future performance.
Growth milestones — £5,000 start, £200/month, 5% annual
How your pot grows over time. Click any row to load that term into the calculator above.
| After | Total paid in | Interest earned | Final balance | Interest as % of balance |
|---|
Why compounding is so powerful
Compound interest means you earn interest not just on your original savings, but also on the interest that has already accumulated. Over time, this creates an exponential growth curve — the longer your money is invested, the faster it grows.
The difference between 10 and 20 years isn't twice the growth — it can be three or four times, because the compounded interest itself has more time to compound.
This is why starting to save early — even with small amounts — is so valuable. Time in the market matters more than timing the market.
Frequently asked questions
No — this calculator shows nominal returns before inflation. To find your real return, subtract the inflation rate from the interest rate. At 5% interest and 2.5% inflation, your real annual return is approximately 2.5%.
UK savings interest is taxed above your Personal Savings Allowance (£1,000/year for basic rate taxpayers, £500 for higher rate). Savings held in an ISA are always tax-free. Pension contributions attract tax relief.
For cash savings, check the current best easy-access or fixed-rate savings rates (currently 4–5% in 2026). For investments, a commonly used long-term stock market assumption is 5–7% per year, though returns are not guaranteed.