Savings & Compound Interest
Simple and compound growth, after tax
Input
The same amount paid in every month.
Set to 0 if the account is tax-free
Interest earns interest.
Result
After tax
12,378,536
Year by year
| Point | Principal | Interest | Total |
|---|---|---|---|
| Year 1 | 6,000,000 | 114,975 | 6,114,975 |
| Year 2 | 12,000,000 | 447,442 | 12,447,442 |
Each row is the actual balance at that point. Your provider’s method and bonus rates may differ.
Compound interest looks unremarkable for a few years and then stops being. Put in an amount and a rate to see where regular saving actually lands, and how much of the gain the tax takes.
How to use
- 1 Choose regular monthly saving or a single deposit.
- 2 Enter the amount, the annual rate and the term.
- 3 Set the tax rate on interest if it applies where you are.
- 4 Compare simple against compound over the same period.
Frequently asked questions
How much difference does compounding make?
Over short periods, very little. Over long ones, everything. £10,000 at 5% for 30 years is £25,000 simple but £43,000 compound — the gap is entirely interest earning its own interest.
What is the rule of 72?
Divide 72 by the annual rate to get the rough number of years to double your money. At 6% that is 12 years; at 9%, eight. It is a good mental check on any growth claim.
Why is my actual return lower than this?
Tax and inflation. A 4% return with 2% inflation is 2% in real terms before tax. This calculator handles tax if you enter a rate; inflation you have to keep in mind yourself.