Compound Interest Calculator
Defaults to £10,000 at 5% for 10 years compounded monthly. The future value is what your money grows to including reinvested interest.
Updated May 2026, using HMRC 2026/27 rates and current ONS / gov.uk figures.
Compound interest is interest earned on prior interest, not just the principal. Monthly compounding (n=12) is most common for UK savings accounts; annual (n=1) for some bonds. The formula: FV = P × (1 + r/n)^(n×t).
How it works. FV = P × (1 + r/n)^(n×t). r as decimal (5% = 0.05).
Worked examples
£10,000 at 5% for 10 years monthly: £16,470 — gain £6,470.
£500/mo into 4% account for 25 years: ~£250,000 — using ISA growth calculator.
£20,000 ISA at 5% for 30 years: £86,400 — tax-free if held in ISA.
Frequently asked questions
What's the difference between simple and compound interest?
Simple interest is calculated only on the principal. Compound interest is calculated on principal plus accumulated interest — so it grows faster over time.
How often should interest compound?
More frequently is mathematically slightly better but the difference is small. Monthly vs annual on £10k at 5% for 10 yrs: £16,470 vs £16,289.
Is the rate AER or gross?
UK savings rates are usually quoted as AER (Annual Equivalent Rate) which already accounts for compounding within the year. So enter the AER directly into this calculator with n=1, or the gross rate with n>1.