Savings Interest Calculator
See how your savings will grow with compound interest. Enter a lump sum, regular monthly deposits, and an interest rate to get a year-by-year breakdown.
How much interest will you earn on your savings? Whether you have a lump sum, make regular monthly deposits, or both, this calculator shows you exactly how your money grows over time with compound interest.
Set a savings target and we will tell you how long it takes to reach it.
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What this calculator does
This calculator projects the growth of your savings over a chosen period, factoring in compound interest and regular monthly contributions. It provides a year-by-year breakdown and can estimate how long it takes to reach a target amount.
Who it is for
Anyone saving money — whether you are building an emergency fund, saving for a deposit, or comparing savings accounts with different interest rates.
How to use it
Enter your starting balance, monthly contribution, annual interest rate, and how long you plan to save. Optionally enter a target amount to see when you will reach it.
How the calculation works
Interest is calculated using compound interest at the frequency you select (monthly, quarterly, or annually). Monthly contributions are added after each month’s interest is calculated. The formula accounts for the compounding effect where you earn interest on previous interest.
Worked example
Starting with £5,000, contributing £200/month at 4.5% AER compounded monthly for 5 years: After 5 years your balance would be approximately £18,220. Total contributions: £17,000. Total interest earned: £1,220.
Assumptions and limitations
- Interest rate remains constant throughout the term
- Does not account for tax on savings interest (the Personal Savings Allowance covers the first £1,000/£500 of interest for basic/higher rate taxpayers)
- Contributions are added at the end of each month
- Does not factor in inflation — real purchasing power may differ
Frequently asked questions
How much interest will I earn on £10,000 in a year?
At 4.5% AER, £10,000 would earn approximately £450 in interest over one year. The exact amount depends on compounding frequency.
What is AER?
AER (Annual Equivalent Rate) shows the total interest you would earn over a year, accounting for compounding. It is the standard way UK savings accounts advertise their rates.
Do I pay tax on savings interest?
Most people do not. The Personal Savings Allowance lets basic rate taxpayers earn up to £1,000 in interest tax-free, and higher rate taxpayers up to £500. Additional rate taxpayers have no allowance.
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Sources and references
Bank of England base rate (https://www.bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate), Personal Savings Allowance (https://www.gov.uk/apply-tax-free-interest-on-savings)
Last updated
Last reviewed: 2025-04-10.