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Savings Calculator
See how regular deposits and compound interest grow your savings over time.
Regular Deposits
Monthly deposits compounded with interest
Growth Visualisation
Stacked chart: deposits vs interest earned
AER Interest
Monthly compounding for accurate projections
Calculate Your Savings Growth
See how regular deposits and interest grow your savings over time.
How Savings Interest Is Calculated
AER and Compounding
AER (Annual Equivalent Rate) is the true annual return including compounding. A 4% gross rate compounded monthly gives a slightly higher AER of ~4.07%. This calculator uses monthly compounding — your deposits earn interest, and that interest earns interest the following month.
The Power of Regular Deposits
Consistency matters more than the starting amount. £300/month at 4.5% for 10 years contributes £36,000 in deposits but grows to £45,000+ with interest. The monthly deposits keep feeding the compounding engine, accelerating growth as the balance increases.
Savings Accounts vs Investing
Cash Savings
Guaranteed returns, FSCS protected up to £85,000, instant access available. Best for emergency funds and short-term goals (under 5 years). Risk: inflation can erode real value if rates are below CPI.
Investing
Higher potential returns (7-10% historically for equities), but with volatility and risk of loss. Best for long-term goals (5+ years). Stocks & Shares ISAs provide tax-free growth. Not FSCS protected for investment losses.
How to Use This Savings Calculator
Enter Starting Balance
Your current savings or initial deposit.
Add Monthly Deposit & Rate
Your regular contribution and the AER.
See Growth Projection
Final balance, interest earned, and growth chart.
Tips for Growing Your Savings Faster
- Automate transfers. Set up a standing order on payday so saving happens before spending. Treating savings as a non-negotiable expense is the most reliable strategy.
- Shop for the best rate. High-street banks often pay poor rates. Online-only banks and building societies frequently offer the best AER. Switch accounts when better deals appear.
- Use your ISA allowance. Cash ISAs protect interest from tax. The personal savings allowance covers £1,000 (basic rate) or £500 (higher rate) of interest, but ISAs give unlimited tax-free growth.
- Increase deposits over time. Even small increases (£25-50 more per month each year) compound significantly. Link increases to pay rises so your lifestyle doesn't inflate with your income.
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