See exactly how your money snowballs. Add a starting amount, an interest rate and regular top-ups, then watch the compounding do the heavy lifting — with the interest earned shown separately from your contributions.
Lump sum plus optional regular deposits
Compound interest is interest paid on both your original money and on the interest you have already earned. Each period, the new balance becomes the base for the next round of interest — which is why a pot can grow far faster than you might expect over the long run.
The standard formula is:
where P is the starting amount, r is the annual rate as a decimal, n is how many times a year interest is added, and t is the number of years. When you also pay in regular deposits, the calculator adds the future value of those contributions on top.
Start with £10,000, add £200 a month, earn 5% compounded monthly for 10 years. You will pay in £24,000 of deposits on top of the £10,000 start, yet end with about £47,530 — roughly £13,530 of that is pure interest you never lifted a finger for.
| Rate | Balance after 10 yrs | Interest earned |
|---|---|---|
| 3% | £41,460 | £7,460 |
| 5% | £47,530 | £13,530 |
| 7% | £54,810 | £20,810 |
| 9% | £63,540 | £29,540 |
Interest from ordinary savings can be taxable, but most basic-rate taxpayers get a £1,000 Personal Savings Allowance (£500 for higher-rate, £0 for additional-rate). Wrapping savings in an ISA keeps the interest tax-free. Check the impact of any taxable interest on your overall position with the income tax calculator, or see what you can afford to save from the take-home pay calculator.
A = P(1 + r/n)nt, where P is the principal, r the annual rate as a decimal, n the number of times interest compounds per year, and t the number of years. Regular deposits add a future-value-of-an-annuity term on top.
A £10,000 lump sum at 5% compounded monthly grows to about £16,470 after 10 years with no extra deposits. Adding £200 a month takes it to roughly £47,530.
For a saver, yes — compound interest pays interest on your interest, so the balance grows faster than simple interest, which only ever pays on the original sum. More frequent compounding increases the effect.
It helps, but less than people think. At 5% on £10,000 for a year, monthly compounding earns about £1.30 more than yearly. The rate and the time invested matter far more than the compounding frequency.
