Compound Interest Calculator

How to use this calculator

Enter your initial investment, the interest rate and how long you will invest, then choose how often interest compounds. To model saving or drawing down, turn on regular deposits, withdrawals or both, and the result updates as you type.

Read the future value at the top, then open the Breakdown, Chart or Summary view to see how the balance builds year by year.

What do I need to enter?

• Currency — changes the symbol and number formatting only; amounts are not converted.
• Initial investment — your starting lump sum, zero or more.
• Interest rate and Rate applies per — the rate and the period it is quoted for: daily, weekly, monthly, quarterly, half-yearly or yearly.
• Compound frequency — how often interest is added to the balance, from daily (365 a year) to yearly, or continuously.
• Term — years plus months (0 to 11). It must be greater than zero and is capped at 75 years.
• Regular contributions — None, Deposits, Withdrawals or Both. Each has an amount and a frequency from weekly to yearly.
• Annual deposit increase — None, a Percentage increase or a Fixed amount increase applied to your deposits each year.
• Contribution timing — Beginning of period or End of period. Beginning invests each deposit one period sooner.

What do the results show?

• Future investment value — the main figure: your projected balance at the end of the term.
• Total interest earned and Total money paid in — what the balance gained, and the initial investment plus all deposits.
• Initial investment, Additional deposits and, when you withdraw,Total withdrawals — the cash flows behind those totals.
• Effective annual rate — what the rate is worth over a full year once compounding is counted.
• Breakdown, Chart and Summary — a yearly or monthly table of deposits, interest and balance, a growth chart, and a recap of your assumptions.

How compound interest works

Compound interest is interest earned on your starting balance plus the interest that has already been added to it. Simple interest only ever pays on the original amount; compound interest pays on a balance that grows every period, so the longer the money is invested the faster it builds.

Three things drive the outcome: the interest rate, the length of time invested, and how much you add along the way. Compounding frequency matters too, but much less than the other three.

Before investing, most people build up an accessible cash buffer first — see the Emergency Fund Calculator to work out a target.

Compound interest formula

That is the standard formula for a single lump sum. When you add regular contributions, or the deposit interval differs from the compounding interval, one formula no longer fits. This calculator instead runs an event-based timeline: every deposit, withdrawal and compounding point is placed on a schedule measured in years from the start, and the balance is grown between each event, so every cash flow receives exactly the growth it is due.

How regular deposits affect growth

Regular deposits can contribute more to the final balance than the starting lump sum, because each one compounds from the day it is paid in. The earlier a deposit lands, the longer it grows.

That is also why the timing option matters. A deposit made at the beginning of each period is invested one period sooner than the same deposit made at the end, so beginning-of-period contributions always produce a slightly higher final balance at the same rate.

Compounding frequency explained

Compounding frequency is how often earned interest is added to the balance so that it starts earning interest itself — daily, weekly, monthly, quarterly, half-yearly or yearly. At the same nominal annual rate, more frequent compounding produces a marginally higher effective annual rate. In practice the rate level, the time invested and your regular deposits usually matter far more than the interval.

Effective annual rate

The effective annual rate is what you actually earn over a year once compounding is counted. A 6% nominal rate compounded monthly is an effective 6.17% a year. For UK savers this is the same idea as the AER quoted on savings accounts, used to compare products on a like-for-like basis. It does not make an investment projection a guaranteed return.

Example: £5,000 invested with monthly deposits

Take the calculator’s starting values: £5,000 invested at 6%, compounded monthly, over 6 years, with £200 added at the end of every month. That grows to approximately £24,442 — made up of £19,400 paid in (the £5,000 lump sum plus £14,400 of deposits) and about £5,042 of interest.

Change the rate to 5% and the term to 5 years and the same £200 monthly deposit produces about £20,018 — £17,000 paid in and roughly £3,018 of interest.

Important assumptions

• The result is an illustration, not financial advice or a guarantee.
• The interest rate is assumed to stay constant for the whole term unless you change it.
• Daily calculations use 365 days per year.
• Tax is not calculated. Platform and management fees are not deducted in this version.
• Inflation is not applied; every figure is a nominal amount in today’s money.
• Figures are rounded for display only; the underlying calculation keeps full precision.

Frequently asked questions