Savings Interest Calculator
Our savings interest calculator shows exactly how much interest you will earn on any balance over any period, at any AER. Whether you are comparing accounts, planning how long to fix, or working out your Personal Savings Allowance usage, this calculator gives you the precise figure instantly.
Savings Interest Calculator
Calculate interest earned on your savings. Includes Personal Savings Allowance, ISA allowance, and tax treatment for 2026/27.
How Savings Interest Is Calculated
UK savings accounts express their rate as AER (Annual Equivalent Rate), which accounts for compounding frequency. The interest earned on £15,000 at 4.8% AER for 1 year is exactly £720. For 2 years with monthly compounding and interest reinvested, the balance grows to £16,474 — total interest £1,474. This calculator applies the AER directly to give the correct compounded result over any period.
Personal Savings Allowance 2026/27
Basic rate taxpayers earn up to £1,000 in savings interest tax-free each year. Higher rate taxpayers have a £500 allowance; additional rate taxpayers have none. At current best rates of around 4.8%, basic rate taxpayers exhaust their allowance at approximately £20,800 in savings. Above that, a cash ISA protects all further interest from tax. Use our ISA Calculator to compare ISA versus taxable savings growth, and our Safe Savings Checker to ensure deposits stay within FSCS protection limits.
Frequently Asked Questions
AER is the effective annual rate after accounting for compounding. For monthly-paid accounts, AER is slightly higher than gross. Always compare using AER for a fair comparison.
Easy-access accounts typically pay interest monthly or annually. Fixed bonds usually pay at maturity or annually. Monthly payment compounds faster than annual — a small but meaningful difference over several years.
Interest above your Personal Savings Allowance is taxable at your marginal rate. Cash ISA interest is always tax-free. Premium bond prizes are always tax-free regardless of amount.
Yes, if you hold more than £85,000 — the FSCS protection limit per institution. Spreading across multiple banking groups ensures full protection on all funds.
Yes. If inflation is 2.5% and your account pays 4.8%, your real return is approximately 2.3%. In periods where inflation exceeds your savings rate, the purchasing power of your savings falls in real terms.
How to Use the Savings Interest Calculator
Enter your savings balance and the annual interest rate (AER) from your account. AER — Annual Equivalent Rate — standardises rates across accounts with different compounding frequencies, making it the most reliable figure for comparison. All UK banks are required to quote AER, so always use this figure rather than the gross rate when comparing accounts.
The personal savings allowance (PSA) means basic-rate taxpayers can earn up to £1,000 in savings interest per year tax-free. Higher-rate taxpayers have a £500 PSA; additional-rate taxpayers have no allowance. Interest above the allowance is taxed at your marginal income tax rate. The calculator shows both gross interest and, where relevant, the after-tax figure based on your tax band selection.
For savings within an ISA, all interest is tax-free regardless of the amount or your tax band. If you regularly earn interest that would exceed your PSA, sheltering savings within a Cash ISA eliminates the tax liability permanently on those funds. The annual ISA allowance (£20,000 for 2026/27) resets each April — unused allowance cannot be carried forward, making each year’s allowance a use-it-or-lose-it opportunity.
Fixed-rate savings accounts and bonds offer higher rates than easy-access accounts in exchange for locking your money away for a set period. Use this calculator to compare the net return from a fixed-rate product at, say, 4.5% with an easy-access account at 3.8%, accounting for your PSA position. The difference in net return must be weighed against the loss of access to your money if circumstances change during the fixed term.
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.