Compound Interest Calculator
Calculate how your savings grow with compound interest over time. See the power of compounding with regular contributions.
Last updated: April 2026 · Source: Bank of England — Interest rates
Final Balance after 10 years
£47,526.55
Total Deposits
£34,000.00
Interest Earned
£13,526.55
Growth
39.8%
| Year | Deposits | Interest | Balance |
|---|---|---|---|
| 1 | £12,400.00 | £567.39 | £12,967.39 |
| 2 | £14,800.00 | £1,286.60 | £16,086.60 |
| 3 | £17,200.00 | £2,165.39 | £19,365.39 |
| 4 | £19,600.00 | £3,211.93 | £22,811.93 |
| 5 | £22,000.00 | £4,434.80 | £26,434.80 |
| 6 | £24,400.00 | £5,843.03 | £30,243.03 |
| 7 | £26,800.00 | £7,446.09 | £34,246.09 |
| 8 | £29,200.00 | £9,253.96 | £38,453.96 |
| 9 | £31,600.00 | £11,277.11 | £42,877.11 |
| 10 | £34,000.00 | £13,526.55 | £47,526.55 |
Disclaimer
This calculator is provided for informational purposes only and should not be considered as financial or tax advice. All calculations are performed locally in your browser — no personal data is collected or sent to our servers. Rates and thresholds are sourced from HMRC and GOV.UK and are updated for the current tax year. Always verify results with HMRC or consult a qualified professional before making financial decisions.
How It Works
Compound interest means earning interest on both your original deposit and the interest already accumulated. The formula is A = P(1 + r/n)^(nt), where P is the principal, r is the annual rate, n is compounding frequency, and t is time in years.
The difference between simple and compound interest grows dramatically over time. A £10,000 deposit at 5% over 20 years grows to £20,000 with simple interest but £26,533 with annual compounding — over £6,500 more, purely from compounding.
Most UK savings accounts compound interest annually or monthly. AER (Annual Equivalent Rate) shows the effective annual return with compounding factored in, making it the best rate to compare between accounts. This calculator supports daily, monthly, quarterly and annual compounding.
Example: £10,000 at 4.5% for 10 years, annual compounding
- Year 1: £10,000 × 1.045 = £10,450.00
- Year 5: £10,000 × 1.045⁵ = £12,461.82
- Year 10: £10,000 × 1.045¹⁰ = £15,529.69
- Total interest earned: £5,529.69
- Simple interest comparison: £4,500.00 (£1,029.69 less)
Source: Bank of England — Interest rates
Frequently Asked Questions
- What is compound interest?
- Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest, your money grows exponentially because you earn interest on your interest.
- How often is interest compounded?
- Interest can be compounded annually, semi-annually, quarterly, monthly or daily. The more frequently interest is compounded, the faster your money grows. Most UK savings accounts compound interest annually or monthly.