This calculator is designed to give an example of how your savings could grow. The figures shown aren’t guaranteed, as actual returns will depend on interest rates, product terms, tax, and your personal circumstances. It doesn’t take into account inflation or charges, and it shouldn’t be relied on as financial advice.
How does compound interest work?
Each time your savings earn interest, that interest is added to your total balance. So you earn interest on the combined amount – your original savings contribution plus the interest already earned.
That cycle keeps repeating. And the longer you leave it to grow, the bigger your balance gets. Given time, the results can be powerful. And the earlier you start, the more time compound interest has to work its magic.
When it comes to compounding, consistency counts. And where you place your money matters. Watch our video to learn more.
Frequently asked questions about compound interest
In the UK, you can earn compound interest through savings accounts, fixed-rate bonds, Cash ISAs, and by reinvesting the returns from Stocks & Shares ISAs and pensions. These options all benefit more the longer you leave your money invested.
It’s a rule of thumb that shows how savings can potentially grow over time, and why patience pays off:
- In the first eight years, your money grows – slowly but steadily.
- In the next four years, momentum builds – the gains become more noticeable.
- In the final three years, the pace accelerates – your savings grow faster than before, without you lifting a finger.
Compound interest has the most impact when savings are left untouched, and interest is allowed to build over time. Here are some ways to maximise growth:
- Explore accounts with competitive rates
- Minimise withdrawals to help your total balance grow
- Add to your savings regularly
- Check how often interest is added – more frequent compounding can lead to higher returns
Don't let your money sit still
Too much of the UK’s cash is asleep. Over £1tn sits in low-interest savings accounts, earning far less than it could. That’s not just a missed opportunity. It’s a wake-up call.
Give your cash the best chance to bloom. By using cash savings platforms like Flagstone, you can quickly compare hundreds of savings products from 65+ banks – all with one login.