Compound Interest Calculator
Your savings
Fill in the fields above to see your result instantly.
How it works
Compound interest reinvests your interest so each year's growth earns more growth. The longer the time horizon and the higher the rate, the more dramatic the effect — Einstein supposedly called it the eighth wonder of the world. The formula: FV = PV × (1+r)^n, plus the future value of regular contributions.
Worked example
£1,000 lump sum + £200/month at 6% for 25 years.
- Total contributed: £61,000
- Final pot: ~£141,000
- Growth: ~£80,000 (over 130% gain over contributions)
Who should use this
- •Anyone planning long-term savings or investments
- •Parents saving for university or a house deposit
- •Pension savers projecting retirement pot
- •ISA investors comparing scenarios
Common mistakes
- ×Forgetting inflation eats real returns (subtract ~2–3%/yr for a real-terms view)
- ×Using historical equity returns (~7%) for cash savings
- ×Ignoring fees — 1% annual fee can cost 20%+ of your final pot
- ×Stopping monthly contributions in a market dip
Frequently asked questions
What's a realistic annual return?▾
Cash savings: 4–5% currently. UK equities long term: ~5–7% real (after inflation). Diversified portfolio: 4–6% real is a common planning assumption.
How does compounding frequency matter?▾
Daily vs monthly vs annual makes only a small difference. The big drivers are rate and time.
What is the rule of 72?▾
Divide 72 by your annual return % to estimate how many years your money takes to double. At 6%, doubles every ~12 years.
Cash ISA or Stocks & Shares?▾
Cash for short-term (under 5 years). Stocks & Shares for longer — equities historically beat cash and inflation over decades.
Does compounding work for debt too?▾
Yes — credit cards charging 24% APR compound against you. Always pay these off before investing.
How much should I save?▾
Common rule: 15–20% of gross income for retirement, plus an emergency fund of 3–6 months' essentials.