Compound Interest Calculator
What's My Compound Interest?
See how your investments can grow over time with the power of compound interest.
Investment Details
Investment Summary
Enter your investment details and click calculate to see your potential returns.
The basics
How compound interest works
Your principal earns interest
You deposit a lump sum (your principal). The rate you agree (whether a savings account, bond, or expected investment return) is applied to that balance over time.
Interest earns interest
At each compounding period the interest is added to your balance, not paid out separately. The next period's interest is calculated on the new, larger total, so growth accelerates.
Time is the real multiplier
The longer money stays invested, the more dramatic compounding becomes. An extra 5 years at the start of a 30-year period often outweighs doubling your monthly contributions mid-way through.
Key concepts
What the numbers mean
The Rule of 72
Divide 72 by your annual interest rate to find roughly how many years it takes your money to double. At 6% it doubles in 12 years; at 9% in just 8 years.
It works in reverse too: inflation at 3% halves the purchasing power of cash in about 24 years. The Rule of 72 is a quick gut-check for any growth or decay problem.
Compounding frequency
The more often interest is compounded, the faster your balance grows. Daily compounding beats annual compounding, though the difference is smaller than most people expect at moderate rates.
Monthly is the most common for savings accounts and ISAs. Annual compounding is typical for bonds and fixed-term deposits.
Real vs nominal returns
A 7% return with 3% inflation gives you a real return of roughly 4%. The headline figure tells you how much money you have; the real return tells you how much you can actually buy.
For long-term planning, always think in today's money. £500,000 in 30 years may feel like a lot, but at 2.5% inflation it has the buying power of roughly £240,000 today.
Why regular contributions transform the outcome
Adding even a modest monthly contribution alongside a lump sum can dramatically shift your final balance. Each contribution immediately starts compounding, so contributions made early compound the longest.
Example: £10,000 lump sum at 7% for 25 years reaches roughly £54,000. Add just £200/month and the balance climbs to around £220,000, more than three times as much from a total investment of only £70,000.
Time in the market
The cost of starting late
Starting at 30 vs 20 more than doubles your pot
The table uses age 30 as the baseline, a common starting point for many people once careers and salaries are established. Starting a decade earlier (age 20) produces more than twice the balance. Waiting a decade (age 40) cuts it by more than half.
The gap isn't caused by extra contributions, it's caused by extra time. Every year of compounding on an existing balance is free growth you can't get back.
£200/month at 7% p.a. - balance at 65 vs starting at 30
45 years invested
40 years invested
35 years invested
25 years invested
15 years invested
Illustrative only. Assumes 7% nominal annual return, no inflation adjustment, contributions on the first of each month.
Starting imperfectly beats waiting for the right moment
The 10-year gap between starting at 20 and starting at 30 costs around £365,000 in this example, yet those 10 years only represent £24,000 of actual extra payments. The remaining £341,000 is pure compounding that simply runs out of time. The most common investing mistake isn't picking the wrong fund: it's delaying the start.
Planning ahead
What could change your result
Returns are never constant
This calculator assumes a fixed annual rate. In practice, investment returns swing year to year. A 7% long-run average could include a -20% year followed by +25%. Sequence matters: a bad run early on hurts far more than the same losses later.
Inflation quietly erodes gains
The calculator shows you nominal figures by default. If your rate of return barely beats inflation, your real wealth gain is far smaller than the headline number suggests. Use a real (inflation-adjusted) rate if you want today's-money figures.
Tax can take a significant slice
Interest on savings is taxable above the Personal Savings Allowance (£500 for higher-rate taxpayers). Capital gains on investments are taxed at disposal. ISAs shelter returns completely, so model your after-tax rate if the account isn't tax-sheltered.
Fees compound against you
Platform charges, fund management fees, and adviser fees all reduce your effective rate. A 1.5% annual fee on a 7% gross return gives a net return of 5.5%. Over 20 years, that gap compounds to a meaningfully smaller pot.
This calculator provides estimates only and assumes a constant rate of return with regular contributions. Actual returns will vary. This is not financial advice.
Understand what makes compounding powerful
Read the compound interest guide for the long-term mechanics behind growth, contribution timing, compounding frequency and real returns.