UK Compound Interest Calculator

Compound interest is interest calculated on both your original balance and the interest it has already earned. Each time interest is added, the next round of interest is calculated on the larger total, so growth accelerates over time rather than staying flat. This calculator shows that curve alongside a straight line of contributions alone, so you can see exactly how much of the final balance is compounding rather than money you put in.

The frequency is how often interest is calculated and added to the balance — annually, semi-annually, quarterly, monthly or daily. The more often interest compounds, the sooner it starts earning interest itself, so a higher compounding frequency produces a slightly higher effective annual return even at the same stated rate. The calculator converts whatever frequency you choose into an effective annual rate, shown in the results, so you can compare like for like.

The stated (or nominal) rate is the headline annual percentage you enter. The effective annual rate is what that actually works out to once compounding is taken into account — it will be slightly higher than the stated rate whenever interest compounds more often than once a year, because each compounding period earns interest on interest already added.

You can add a monthly or an annual contribution on top of your starting balance. Monthly contributions are added at the end of each month, and annual contributions at the end of each year, both before that period's interest is calculated on the new total. This mirrors how most UK savings and investment accounts apply regular deposits.

Yes — click the £ next to Regular contribution to switch it to a withdrawal (it turns into −£). The calculator then subtracts that amount each month or year instead of adding it, so you can see how a balance runs down under regular drawdowns. Withdrawals stop being taken once the balance reaches zero, and the projection notes the point where that happens.

Yes — enter a negative percentage to model a loss, such as fees outstripping growth or a falling investment. The balance still compounds, just downward, and the chart and table update to show it shrinking rather than growing.

The solid line is your balance with compound interest applied. The dashed line is the same contribution schedule with no interest at all — effectively money kept in a drawer. The gap between the two lines is the effect of compounding, and it widens the longer the money is left to grow.

No. The calculator shows gross growth before any tax. In the UK, interest and investment growth may be sheltered from tax entirely inside an ISA, or may be taxable depending on the account type, your total income and your annual allowances. Check how your specific account is taxed before relying on these figures.

Treat it as an illustration, not a forecast. Savings rates move with the Bank of England base rate, and investment returns vary year to year and can fall as well as rise — a stock market investment will not grow in a smooth straight line the way this projection does. It is worth running the calculator again with a more cautious rate to see how sensitive the outcome is.

The calculator assumes a single constant interest rate and regular, unchanging contributions for the whole period. It does not account for account fees or charges, inflation eroding the real value of the balance, tax, or contribution limits such as the annual ISA allowance. It is a tool for understanding the shape of compound growth, not a substitute for financial advice.