Compound Interest Calculator
Under a mattress the same money would be £49,000. Compounding added £35,919 on top of what you paid in.
Year-by-year growth
| Year | Paid in | Interest | Balance |
|---|---|---|---|
| 1 | £3,400 | £107 | £3,507 |
| 2 | £5,800 | £342 | £6,142 |
| 3 | £8,200 | £712 | £8,912 |
| 4 | £10,600 | £1,224 | £11,824 |
| 5 | £13,000 | £1,885 | £14,885 |
| 6 | £15,400 | £2,702 | £18,102 |
| 7 | £17,800 | £3,684 | £21,484 |
| 8 | £20,200 | £4,839 | £25,039 |
| 9 | £22,600 | £6,175 | £28,775 |
| 10 | £25,000 | £7,703 | £32,703 |
| 11 | £27,400 | £9,432 | £36,832 |
| 12 | £29,800 | £11,373 | £41,173 |
| 13 | £32,200 | £13,535 | £45,735 |
| 14 | £34,600 | £15,930 | £50,530 |
| 15 | £37,000 | £18,571 | £55,571 |
| 16 | £39,400 | £21,470 | £60,870 |
| 17 | £41,800 | £24,640 | £66,440 |
| 18 | £44,200 | £28,095 | £72,295 |
| 19 | £46,600 | £31,850 | £78,450 |
| 20 | £49,000 | £35,919 | £84,919 |
Interest is compounded monthly and contributions are added at the end of each month. Figures are before inflation and before any tax on the interest.
See how savings grow over time when interest compounds and you keep adding to the pot. Set a starting amount, a monthly contribution, a rate and a term, and the year-by-year table shows exactly how much came from your own money and how much the interest added.
How it works
The projection runs month by month rather than using a single formula. Each month the balance earns one twelfth of the annual rate, then the contribution is added, and the new balance carries into the following month. That ordering matters — money added at the end of a month has not had time to earn anything during it.
This is the same arithmetic as the mortgage calculator, running in the opposite direction. A mortgage is compound interest working against you; a savings pot is the identical mechanism working in your favour.
The comparison line under the results strips the growth out entirely, showing what the same payments would total under a mattress, so the contribution of compounding is separated from the contribution of simply saving diligently.
Worked example
Start with £1,000, add £200 a month at 5% for 20 years and you finish with about £84,900. Of that, £49,000 is money you paid in and roughly £35,900 is interest — so more than 40% of the final pot was earned rather than saved.
Stretch the same plan to 30 years and the balance almost exactly doubles to around £170,900, even though you have only paid in 49% more of your own money. That disproportion is the entire point of compounding, and it is why the last decade of a long savings plan does so much of the work.
Common questions
What is compound interest, in plain terms?
Interest that earns interest. Simple interest always pays on the original amount, so £1,000 at 5% earns £50 every year forever. Compound interest pays on the balance, so year two earns interest on £1,050, year three on more again — and each year’s growth is slightly larger than the last.
How often is interest compounded here?
Monthly, with contributions added at the end of each month. Monthly compounding produces slightly more than annual compounding at the same headline rate — £1,000 at 5% over 30 years reaches about £4,468 monthly against roughly £4,322 annually.
Why does the interest share grow so much in later years?
Because growth is proportional to the balance, and the balance is largest at the end. In a long projection the final few years often add more than the first decade, which is the whole argument for starting early rather than saving harder later.
What does "increase contributions" do?
It raises what you pay in each year by the percentage you set, which models keeping your saving in step with pay rises. Even a modest yearly uplift makes a substantial difference over long periods.
Are these figures adjusted for inflation?
No. Everything is in today’s pounds at face value. If you want a rough sense of real spending power, subtract expected inflation from the interest rate — 5% growth with 2.5% inflation behaves roughly like 2.5% in real terms.
Does this account for tax on the interest?
No. Interest earned outside an ISA or pension may be taxable depending on your personal savings allowance and income. The figures shown are gross.