Monthly Savings Interest Calculator
See exactly how your savings grow month by month with compound or simple interest. Compare ISA rates, fixed-rate bonds, and easy-access accounts in seconds.
Savings Interest Calculator
Enter your savings details to see projected growth
The lump sum you’re starting with (can be £0)
How much you’ll add every month
Annual Equivalent Rate — check your account’s current AER
How long you plan to save (1 month – 50 years)
Most UK savings accounts use monthly compound interest
Account type affects tax treatment and bonus entitlements
Used to estimate tax on interest above your PSA
Basic rate: £1,000 · Higher rate: £500 · Additional: £0
Savings Projection
Your interest growth breakdown
Enter your savings details and click Calculate to see how your money grows month by month with interest.
How Savings Interest Works in the UK
When you deposit money in a UK savings account, the bank pays you interest as a reward for letting them use your funds. The rate is expressed as an Annual Equivalent Rate (AER), which is the standardised measure used across all UK savings products so you can compare them fairly.
Compound vs Simple Interest
Compound interest is earned on both your original deposit and the interest already credited to your account. Most UK savings accounts compound monthly, meaning your balance grows faster over time — often called “interest on interest.” Simple interest is calculated only on the original principal each period, and is less common in everyday savings accounts.
UK Account Types Explained
- Easy-Access ISA / Cash ISA: Tax-free savings up to £20,000/year. Flexible and no lock-in.
- Fixed-Rate Bond: Higher rates in exchange for locking your money away (1–5 years).
- Regular Saver: Requires monthly contributions; often offers the highest rates.
- Lifetime ISA (LISA): 25% government bonus on up to £4,000/year, for first-time buyers or retirement.
- Easy-Access Savings: Flexible, no lock-in, but usually lower rates.
Frequently Asked Questions
What is AER and why does it matter?
AER (Annual Equivalent Rate) shows the interest you’d earn over a year, including the effect of compounding. It’s the fairest way to compare savings accounts regardless of how often interest is paid.
Do I pay tax on savings interest?
Most UK savers have a Personal Savings Allowance (PSA): £1,000 for basic-rate taxpayers and £500 for higher-rate. Interest above this is taxed at your income tax rate. ISAs are always tax-free.
How much can I put in an ISA?
The annual ISA allowance is £20,000 per tax year (2025/26). You can split this across different ISA types — Cash ISA, Stocks & Shares ISA, and Lifetime ISA.
Is compound interest always better?
For savers, yes — compound interest grows your balance faster. The benefit is most noticeable over longer time periods and higher balances, which is why starting early matters so much.
How accurate is this calculator?
This tool provides close estimates based on the inputs you provide. Actual returns may vary slightly depending on when your bank credits interest and any rate changes during the term.