Checks Out
All calculators
Mortgages & MoneyLive

Compound Interest Calculator

Project how a savings pot grows over time when interest is reinvested — with optional regular monthly contributions.

Short answer

Compound interest is interest on interest. £100/month at 6% annual return becomes ~£46,200 after 20 years vs just £24,000 if you'd stuffed it under a mattress.

Your savings

£
£
%
£

Fill in the fields above to see your result instantly.

Calculation method, coverage and version

Inputs used
Starting amount, Monthly contribution, Annual return / interest rate, Years to invest, Target pot (only used when solving).
Calculation approach
The calculator applies the rules and assumptions described in “How it works” to the values you enter. Rounding can cause small differences from an official or provider calculation.
Coverage
Mortgages & Money. UK nations, tax treatment, local rules and provider criteria can differ; check the official sources shown below before acting.
Content version
No page-specific review date is currently published. Treat the result as indicative and verify current rules independently.
Not included unless explicitly requested: personal circumstances not entered, provider discretion, future rule changes, professional fees and case-specific exceptions. Read the full calculator methodology.

Primary sources and official verification

Use these official sources to verify current rules before acting. Coverage and dates can differ across England, Scotland, Wales and Northern Ireland.

See the sitewide source policy.

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.

Related calculators

Pension Gap Calculator →Retirement Savings →ISA Calculator →Emergency Fund →Debt Repayment →Salary Sacrifice →