Savings Interest Calculator
See how your savings grow with compound interest. Enter your deposit, any monthly contributions, the interest rate, and how long you plan to save. Results update with a year-by-year breakdown.
How the savings interest calculator works
This calculator uses compound interest to project how your savings will grow over time. Compound interest means you earn interest not only on your original deposit but also on the interest already added to your account. Over long periods, this compounding effect can significantly accelerate growth — a process sometimes described as earning "interest on interest". You can choose monthly or annual compounding, with monthly being the most common arrangement for UK savings accounts.
UK savers benefit from the personal savings allowance (PSA), which allows basic rate taxpayers to earn up to £1,000 in savings interest tax-free each tax year, and higher rate taxpayers up to £500. Interest held within a Cash ISA is always tax-free and does not count toward the PSA. With savings rates at multi-year highs in recent years, it is worth shopping around — best-buy easy-access accounts and fixed-rate bonds can offer meaningfully different returns.
Regular monthly contributions can dramatically increase your final balance compared to a lump sum alone, thanks to the compounding of both contributions and interest. The year-by-year table shows exactly how your balance builds, making it easy to set realistic savings goals and track your progress.
Frequently asked questions
How is savings interest calculated?
Savings interest is most commonly calculated using compound interest, where you earn interest on both your original deposit and any interest already accumulated. The formula is A = P(1 + r/n)^(nt), where P is the principal, r is the annual rate, n is the number of compounding periods per year, and t is time in years. Monthly compounding is the most common frequency for UK savings accounts, meaning interest is added to your balance each month.
What is the personal savings allowance?
The personal savings allowance (PSA) lets most UK taxpayers earn a certain amount of interest tax-free each tax year. Basic rate (20%) taxpayers can earn up to £1,000 in interest tax-free, while higher rate (40%) taxpayers have a £500 allowance. Additional rate (45%) taxpayers receive no PSA. Interest earned above your allowance must be declared on a self-assessment tax return and is taxed at your marginal rate. Interest held within a Cash ISA does not count toward the PSA and is always tax-free.
Should I choose a fixed-rate or easy-access savings account?
Fixed-rate accounts (also called fixed bonds) generally offer higher interest rates in exchange for locking your money away for a set period — typically one to five years. Easy-access accounts let you withdraw at any time but usually pay a lower rate. A good approach is to keep your emergency fund in an easy-access account and consider fixing the remainder for a term you are comfortable with. Always check the FSCS protection limit of £85,000 per authorised institution.
Does the Bank of England base rate affect my savings?
Yes. When the Bank of England raises its base rate, savings account rates generally rise as well, though lenders often pass on increases more quickly to borrowers than to savers. When the base rate falls, savings rates typically follow. Easy-access accounts are more directly affected as their rates can change at any time, whereas fixed-rate accounts lock in a rate for the agreed term regardless of what happens to the base rate during that period.