Savings Calculator
Our free savings calculator projects how a lump sum or regular monthly contributions grow over any time horizon at any interest rate. It applies compound interest monthly and shows your final balance, total contributions, and total interest earned — giving you a clear picture of the long-term power of consistent saving.
Savings Calculator
See how your savings grow with compound interest and monthly contributions.
The Power of Compound Interest
Compound interest means you earn interest on your interest — the single most important concept in personal finance. A lump sum of £10,000 at 4.5% for 20 years grows to approximately £24,100 — more than doubling, with £14,100 coming purely from compound interest on an original investment that never changed. Adding £200 per month to that same pot produces a final balance of approximately £84,000 — of which £48,000 is compound interest.
The key variable is time, not just rate. Starting savings 10 years earlier than a colleague, even at the same rate and contribution, typically produces a pot worth 60–100% more at retirement. This is why the advice to start saving early is not merely conventional wisdom — the mathematics are compelling.
Interest Rates Available in 2026
Cash savings rates in 2026 vary significantly by account type. Easy-access accounts from the best providers offer around 4.5–5.0% AER. Fixed-term bonds (1–5 years) offer similar or marginally higher rates depending on the term chosen. Premium Bonds from NS&I offer a tax-free prize fund rate of approximately 4.4%, with the potential for larger prizes but an average return below the headline. Cash ISAs offer rates comparable to easy-access accounts with the added benefit of tax-free interest — see our ISA Calculator for a projection using your ISA allowance.
Frequently Asked Questions
Basic rate taxpayers have a Personal Savings Allowance (PSA) of £1,000 per year — interest below this level is tax-free. Higher rate taxpayers have a £500 PSA. Additional rate (45%) taxpayers have no PSA. Interest above your PSA is taxed at your marginal income tax rate. Cash ISA interest is always tax-free regardless of the amount.
AER (Annual Equivalent Rate) shows what you would earn if interest were compounded over a year, taking into account how frequently interest is paid. A monthly-paid account at 4.5% gross pays 4.59% AER due to monthly compounding. Always compare savings accounts using AER for a like-for-like comparison.
If your savings interest will exceed your Personal Savings Allowance (£1,000 basic rate, £500 higher rate), a cash ISA is tax-efficient. At current rates, £1,000 PSA is exhausted at approximately £22,000 in savings for a basic rate taxpayer. Above this threshold, ISAs protect all interest from tax. For those with very large savings, the ISA allowance of £20,000 per year may not shelter all gains.
The Financial Services Compensation Scheme (FSCS) protects up to £85,000 per person per banking group. If you hold more than £85,000 with any single institution, the excess is at risk if the institution fails. Our Safe Savings Checker helps you identify how to distribute larger sums across multiple institutions for full FSCS protection.
Financial advisers generally recommend an emergency fund of 3–6 months of essential monthly expenses in an accessible account. Beyond this, consider whether higher-returning fixed-term accounts, stocks and shares ISAs, or pension contributions offer better long-term outcomes for money you will not need in the short term.
Enter your initial deposit and monthly contribution, then set the interest rate and time period. The calculator compounds interest monthly, reflecting how most UK savings accounts operate in practice. AER (Annual Equivalent Rate) is the standardised comparison figure — always use AER when comparing accounts, not the gross or net rate. For ISA savings, all interest is tax-free. For standard savings accounts, the Personal Savings Allowance exempts the first £1,000 of interest for basic-rate taxpayers (£500 for higher-rate). If you expect to exceed your PSA, the effective return on a cash ISA versus a taxable account changes materially — the calculator shows pre-tax growth for planning purposes. Run the projection at several different time points to see how the trajectory steepens in later years through the compounding effect.
Important Information
This calculator is provided for general information and planning purposes only. It does not constitute financial or tax advice and should not be relied upon as such. Figures are indicative estimates based on simplified, publicly available criteria and stated assumptions. Actual results depend on your full circumstances. See our Disclaimer for further information.