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Monthly compound interest

The savings-account view: interest compounding every month on the balance plus your regular deposits, charted and tabled.

Guide

How to use it

  1. Enter the opening balance and what you will add each month.
  2. Use your account's advertised rate; the projection compounds it monthly.
  3. Read the tiles and chart, then the table to see each year's interest line grow.

Examples

Worked examples

The emergency fund

£0 start, £150 a month at 4.5%: about £5,780 after 3 years, roughly £380 of it interest. Early on, the deposits do the lifting.

£10,000 parked for a year

At 4.5% compounded monthly, twelve months later the balance reads about £10,459. Compounding earns £9 more than the same rate paid once at year end.

The expiring bonus rate

Run the projection twice, once at the bonus rate and once at the underlying rate, and the gap between final balances is what loyalty costs.

Method

How it works

Each month the balance grows by the annual rate divided by twelve, then your deposit is added. Real accounts mostly accrue daily and pay monthly or yearly; monthly compounding is the closest simple model and errs by pennies at savings rates.

Constant rate, no fees, tax or inflation, contributions at month end. Arithmetic, not advice, and nothing you enter leaves your browser.

FAQ

Frequently asked questions

Do savings accounts compound monthly?

Most easy-access accounts calculate interest daily and pay it monthly or yearly. Monthly compounding is the closest simple model, which is why this page fixes it.

What is the difference between gross rate and AER?

AER shows what the rate delivers over a year with compounding included, so accounts can be compared fairly. If you enter an AER here with monthly compounding the projection runs very slightly hot; the gap is small at savings rates.

How much interest does £10,000 earn in a year?

At 4.5% compounded monthly, about £459. The tool shows the year-by-year build-up in its table.

Why does my bank pay less than the calculator shows?

Rates change mid-year, bonus rates expire, and withdrawals shrink the base. A projection assumes the rate you typed holds for the whole term.

Is interest on savings taxed?

Outside ISAs, interest above your personal savings allowance is taxable in the UK. The projection is gross; your net result depends on your tax position.

Is this advice?

No. It is arithmetic at a constant rate with no fees, tax or inflation. Product choices belong with a regulated adviser.

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Compound interestThe full calculator with a choice of compounding. Savings goal calculatorSolve for the monthly amount a target needs. Take-home pay calculatorWork out what lands in the account before saving it.
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Monthly compound interest

The savings-account view: interest compounding every month on the balance plus your regular deposits, charted and tabled.

£89,902 balance after 20 years
£53,000 total paid in
£36,902 interest earned

Each bar is one year: gold is money paid in, blue is interest on top.

Balance compounds monthly at 4.5% with £200 added monthly · FV = P(1+r÷n)ⁿᵗ + PMT×((1+r÷n)ⁿᵗ−1)÷(r÷n)

Year-by-year table
Year Paid in Interest Balance 1 £7,400 £280 £7,680 2 £9,800 £683 £10,483 3 £12,200 £1,214 £13,414 4 £14,600 £1,881 £16,481 5 £17,000 £2,688 £19,688 6 £19,400 £3,643 £23,043 7 £21,800 £4,751 £26,551 8 £24,200 £6,021 £30,221 9 £26,600 £7,460 £34,060 10 £29,000 £9,075 £38,075 11 £31,400 £10,874 £42,274 12 £33,800 £12,866 £46,666 13 £36,200 £15,060 £51,260 14 £38,600 £17,465 £56,065 15 £41,000 £20,091 £61,091 16 £43,400 £22,947 £66,347 17 £45,800 £26,045 £71,845 18 £48,200 £29,396 £77,596 19 £50,600 £33,011 £83,611 20 £53,000 £36,902 £89,902

Projections assume a constant rate, contributions at month end and no fees, tax or inflation. This is arithmetic, not financial advice.

Everything runs in your browser. Nothing you enter is sent to a server.

Guide

How to use it

  1. Enter the opening balance and what you will add each month.
  2. Use your account's advertised rate; the projection compounds it monthly.
  3. Read the tiles and chart, then the table to see each year's interest line grow.

Examples

Worked examples

The emergency fund

£0 start, £150 a month at 4.5%: about £5,780 after 3 years, roughly £380 of it interest. Early on, the deposits do the lifting.

£10,000 parked for a year

At 4.5% compounded monthly, twelve months later the balance reads about £10,459. Compounding earns £9 more than the same rate paid once at year end.

The expiring bonus rate

Run the projection twice, once at the bonus rate and once at the underlying rate, and the gap between final balances is what loyalty costs.

Method

How it works

Each month the balance grows by the annual rate divided by twelve, then your deposit is added. Real accounts mostly accrue daily and pay monthly or yearly; monthly compounding is the closest simple model and errs by pennies at savings rates.

Constant rate, no fees, tax or inflation, contributions at month end. Arithmetic, not advice, and nothing you enter leaves your browser.

FAQ

Frequently asked questions

Do savings accounts compound monthly?

Most easy-access accounts calculate interest daily and pay it monthly or yearly. Monthly compounding is the closest simple model, which is why this page fixes it.

What is the difference between gross rate and AER?

AER shows what the rate delivers over a year with compounding included, so accounts can be compared fairly. If you enter an AER here with monthly compounding the projection runs very slightly hot; the gap is small at savings rates.

How much interest does £10,000 earn in a year?

At 4.5% compounded monthly, about £459. The tool shows the year-by-year build-up in its table.

Why does my bank pay less than the calculator shows?

Rates change mid-year, bonus rates expire, and withdrawals shrink the base. A projection assumes the rate you typed holds for the whole term.

Is interest on savings taxed?

Outside ISAs, interest above your personal savings allowance is taxable in the UK. The projection is gross; your net result depends on your tax position.

Is this advice?

No. It is arithmetic at a constant rate with no fees, tax or inflation. Product choices belong with a regulated adviser.

More tools

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