See how your savings grow with compound interest, with a chart showing growth over time.
£16,470
Final balance
£6,470
Total interest
£10,000
Total invested
Growth over 10 years
Compound interest earns interest on your interest. £10,000 at 5% simple interest for 10 years = £15,000. The same amount at 5% compounded annually = £16,289, an extra £1,289 for doing nothing differently.
The more often interest compounds, the more you earn. £10,000 at 5% for 10 years: annually = £16,289, monthly = £16,470, daily = £16,487. The difference between monthly and daily is small, but annually vs daily is notable.
A quick mental shortcut: divide 72 by the annual interest rate to estimate how many years it takes to double your money. At 6%, 72 ÷ 6 = 12 years. At 9%, 72 ÷ 9 = 8 years. It's approximate but remarkably accurate for rates up to ~20%.
Investing £5,000 at age 20 at 7% annually gives you £75,000 by 65. Waiting until 30 and investing £10,000 (double) gives only £76,000. Starting a decade earlier with half the money produces nearly the same result.
Compound interest calculators usually show nominal returns, before inflation. A 6% nominal return with 3% inflation is only a 3% real return. Over 30 years, inflation significantly erodes the purchasing power of your final amount.
In the UK, a Stocks and Shares ISA lets you invest up to £20,000 per year with all returns (dividends and capital gains) completely tax-free. Tax-free compounding is significantly more powerful than taxed compounding over long periods.
See how your savings or investments grow over time with compound interest. Enter a starting amount, rate, and term to generate an instant growth chart and final balance.
£10,000 at 5% for 10 years, compounded annually
Final balance: £16,289 (£6,289 interest earned)
£5,000 at 7% for 20 years, compounded monthly
Final balance: approx £20,387
£1,000 at 3% for 5 years, compounded daily
Final balance: £1,162 (£162 interest earned)
Compound interest formula: A = P(1 + r/n)^(nt)
A = £16,288.95
The Rule of 72 is a quick mental shortcut: divide 72 by the annual interest rate to estimate how many years it takes to double your money. At 6%, that is 72 ÷ 6 = 12 years. At 9%, it is 8 years. The rule was described as early as 1494 by the Italian mathematician Luca Pacioli.
Compound interest is interest calculated on both the initial principal and the interest already accumulated. Unlike simple interest, which only earns on the original amount, compound interest earns interest on interest — causing your money to grow at an accelerating rate over time. This snowball effect is why starting to save early is so powerful.
The more frequently interest compounds, the more you earn. For example, £10,000 at 5% for 10 years: compounded annually gives £16,289; compounded monthly gives £16,470; compounded daily gives £16,487. The difference between monthly and daily is small, but annually versus daily adds up. Most savings accounts in the UK compound monthly or daily.
With simple interest, you earn interest only on your original deposit. With compound interest, you earn interest on both your original deposit and any interest already earned. Over long periods this difference is enormous: £10,000 at 5% for 20 years earns £10,000 in simple interest but £16,533 in compound interest (compounded annually).
Use the annual interest rate offered by your savings account, ISA, or investment. For savings accounts this is typically 3–5% at the time of writing. For stock market investments, 6–8% is a commonly used historical average, though past performance is not a guarantee of future returns. Always use the actual rate from your provider for accuracy.
Yes. Enter a monthly contribution amount in the 'Monthly top-up' field. The calculator adds these contributions throughout the term and compounds them along with your initial deposit. Regular contributions often make more difference than a large lump sum, especially over a 10–30 year period.