Compound Interest Calculator
See how your savings or investments could grow, with optional monthly deposits and daily, monthly or yearly compounding.
Result
ProjectionEnter a starting amount, rate and number of years.
How compound interest is worked out
Each month, interest is added to the balance at the monthly equivalent of your annual rate, and then any monthly deposit is added. With yearly, quarterly or daily compounding, the monthly equivalent is chosen so the interest over a year matches that compounding frequency exactly.
Lump sum only
A = P × (1 + r ÷ n)^(n × t)
P is the starting amount, r the annual rate as a decimal, n how many times a year interest is added and t the number of years.
Worked example
£10,000 × (1 + 0.04 ÷ 12)^120 = £14,908.33
£10,000 at 4% a year, compounded monthly for 10 years, earns £4,908.33 in interest – £908 more than simple interest would.
Tax on savings interest isn’t included. Most people can earn some interest tax-free through the Personal Savings Allowance or an ISA; see GOV.UK (opens in a new tab) for the current rules.
Frequently asked questions
What is compound interest?
Compound interest is interest earned on your interest as well as on the money you put in. Each time interest is added, the next lot of interest is worked out on the bigger balance, so growth speeds up over time.
Does daily compounding make much difference?
A little. At 4% a year, daily compounding gives an effective annual rate (AER) of about 4.08%, compared with 4.07% for monthly and 4% for yearly. The rate itself and how long you save matter far more.
What is AER?
AER (annual equivalent rate) shows what the interest would be over a year once compounding is included, so you can compare accounts that add interest at different frequencies. UK savings accounts must quote an AER.
Is the result guaranteed?
No. It assumes the rate stays the same for the whole period and doesn’t include tax, fees or inflation. Savings rates change, and investments can fall as well as rise.
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