UK Interest Calculator 2026/27

Compare simple and compound interest side by side. See how compounding frequency and regular contributions dramatically grow your savings over time.

Simple Interest Total
£0.00
Compound Final Balance
£0.00
Compound Interest Earned
£0.00
Simple Interest Earned
£0.00
Total Contributions
£0.00
Extra from Compounding
£0.00
Enter your details and click Calculate to compare simple vs compound interest.
Simple vs Compound Interest Growth
Simple vs Compound Interest Explained

Simple interest is calculated only on the original principal. If you deposit £10,000 at 5% simple interest for 10 years, you earn £500/year regardless · a total of £5,000 interest.

Compound interest is calculated on both the principal and the accumulated interest. Each period, your interest earns interest, creating exponential growth. The more frequently interest compounds (daily > monthly > annually), the higher your final balance.

Regular contributions amplify the power of compounding significantly. Even modest monthly additions can add up to a substantial sum over a decade or more.

UK savings accounts typically compound interest daily or monthly. Cash ISAs, fixed-rate bonds and savings accounts all use compound interest. Check your account terms to see how frequently interest is applied.

Compound Interest · Watch Your Money Grow

How £10,000 grows at different interest rates over time with compound interest (annual compounding).

Interest Rate After 1 Year After 5 Years After 10 Years After 20 Years After 30 Years
2%£10,200£11,041£12,190£14,859£18,114
3%£10,300£11,593£13,439£18,061£24,273
4%£10,400£12,167£14,802£21,911£32,434
4.5%£10,450£12,462£15,530£24,117£37,454
5%£10,500£12,763£16,289£26,533£43,219
7%£10,700£14,026£19,672£38,697£76,123
10%£11,000£16,105£25,937£67,275£174,494

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Interest Calculator FAQs

How does compound interest work in the UK?
Compound interest is calculated on both your original deposit and the interest already earned, so your interest earns interest. At 5% annually, £10,000 grows to £16,289 after 10 years with compounding · versus £15,000 with simple interest. The longer the term, the more powerful the effect becomes.
How much interest do I earn on £10,000 savings in the UK?
At 4.5% AER with annual compounding, £10,000 grows to £10,450 after 1 year, £12,462 after 5 years, and £15,530 after 10 years. At 5% AER the 10-year balance reaches £16,289. Monthly compounding adds a small additional amount over annual compounding at the same rate.
Simple vs compound interest · what is the difference?
Simple interest is calculated only on the original principal each period. Compound interest is calculated on the principal plus all previously earned interest. Over short periods the difference is small · over 20–30 years it becomes dramatic. At 7%, £10,000 reaches £19,672 after 10 years with compounding but only £17,000 with simple interest.
How can I maximise savings interest in the UK in 2026?
Use your £20,000 annual Cash ISA allowance first for tax-free interest. Compare easy access accounts, fixed-rate bonds and notice accounts by AER · not just the headline rate. Consider splitting savings between instant access (for emergencies) and fixed-rate bonds (for higher rates). Regular contributions, even small ones, significantly boost the final balance through compounding.

For informational purposes only · Not financial advice · Tax rates shown are for 2026/27