How does compound interest work?

Compound interest pays interest on your balance and on the interest already added. Each period the balance grows by the periodic rate, then the next period earns interest on the bigger balance. Over years this snowballs, so the same rate earns far more than simple (non-compounding) interest. With monthly compounding, the monthly rate is the annual rate divided by 12.

What is the formula for savings with monthly deposits?

Future value = P·(1+i)^N + C·[((1+i)^N − 1) ÷ i], where P is the starting amount, C the monthly deposit, i the monthly interest rate (annual rate ÷ 12 ÷ 100) and N the number of months (years × 12). The first term grows your lump sum; the second grows the stream of monthly deposits. The calculator above does this for the numbers you enter.

What interest rate should I use?

The calculator pre-fills the Bank of England Bank Rate (3.75% since 2025-12-18) as an illustrative benchmark, because the Bank Rate guides the rates savings providers offer. Your actual savings rate will differ — easy-access accounts usually pay below it and fixed-term or notice accounts sometimes above it. Enter the rate your provider actually quotes for a precise figure.

Is interest on savings taxed?

It can be. In the UK a Personal Savings Allowance lets basic-rate taxpayers earn some interest tax-free each year, and a cash ISA shelters interest from tax entirely. This calculator shows interest before tax, so a taxed account would grow a little slower. Tax rules depend on your circumstances — this is information, not tax advice.

Does GeraCash pay interest today?

No. GeraCash is pre-launch and operates a waitlist only; it is planned to launch in 2027 with a licensed payment partner. This calculator is a free educational tool that works entirely on the numbers you enter, for any savings account.

GeraCash / Savings & Compound Interest Calculator

Savings & Compound Interest Calculator

See how a starting balance plus regular monthly deposits grows with compound interest — and what it is really worth once you adjust for inflation. The rate field pre-fills with the Bank of England Bank Rate (3.75%) as an illustrative benchmark; enter your own account rate for a precise figure.

How much will my savings grow with compound interest, and what will they be worth after inflation?

Compound interest grows savings by the formula FV = P·(1+i)^N + C·[((1+i)^N − 1) ÷ i], where i is the monthly rate and N the number of months. As an illustrative benchmark, the Bank of England Bank Rate is 3.75% (since 2025-12-18); with ONS CPI inflation at 2.8% the real return on a benchmark-rate account is about 0.95 percentage points. Use the calculator with your own figures.

Source:Bank of England — Official Bank Rate (series IUDBEDR)·as of effective 2025-12-18updated formula — benchmark rate updates when the Bank of England changes Bank Rate (last: 30 June 2026)

Project your savings

Everything is computed from the numbers you type — nothing is stored. Tick the inflation box to see the result in today’s money.

Starting amount (£)

What you have saved today

Monthly deposit (£)

Added at the end of each month

Annual interest rate (%)

Number of years

How long you keep saving

Show value in today's money (adjust for 2.8% ONS CPI inflation)

After 10 years your savings could be worth about

£36,336

You pay in

£29,000

starting amount + all monthly deposits

Interest earned

£7,336

the growth from compounding

FV = P·(1+i)^N + C·[((1+i)^N − 1) ÷ i], monthly i & N.

Compound interest before tax, assuming the rate and your monthly deposit stay the same and interest compounds monthly. Real savings rates change and may be taxed; an ISA shelters interest from tax. The Bank of England Bank Rate guides — but does not set — the rates providers offer. Not financial advice.

Worked example: £5,000 + £200/month at 3.75%

Computed from the compound-interest formula at the 3.75% Bank Rate benchmark, compounded monthly. The last column deflates the balance by ONS CPI inflation (2.8%) to show purchasing power in today’s money. Illustrative round inputs — not a promised return.

Projected growth of £5,000 plus £200 a month at 3.75% compounded monthly. Real-terms column uses ONS CPI 2.8%.
Term	You pay in	Interest earned	Future balance	In today's money
5 years	£17,000	£2,206	£19,206	£16,729
10 years	£29,000	£7,336	£36,336	£27,568
20 years	£53,000	£28,902	£81,902	£47,145
30 years	£77,000	£71,162	£148,162	£64,706

How to use the calculator, step by step

Enter what you already have. Type your current savings balance into the starting amount field.
Add your monthly deposit. Enter how much you plan to add each month. Leave it at 0 for a lump-sum-only projection.
Set the interest rate. Use your provider's quoted rate, or click "Use Bank of England Bank Rate" for the 3.75% illustrative benchmark.
Choose the number of years. Set how long you will keep saving to see the compounded future balance and the interest earned.
Check it in today’s money. Tick "Show value in today's money" to deflate the result by the latest ONS CPI inflation rate and see real purchasing power.

Frequently asked questions

How does compound interest work?: Compound interest pays interest on your balance and on the interest already added. Each period the balance grows by the periodic rate, then the next period earns interest on the bigger balance. Over years this snowballs, so the same rate earns far more than simple (non-compounding) interest. With monthly compounding, the monthly rate is the annual rate divided by 12.
What is the formula for savings with monthly deposits?: Future value = P·(1+i)^N + C·[((1+i)^N − 1) ÷ i], where P is the starting amount, C the monthly deposit, i the monthly interest rate (annual rate ÷ 12 ÷ 100) and N the number of months (years × 12). The first term grows your lump sum; the second grows the stream of monthly deposits. The calculator above does this for the numbers you enter.
What interest rate should I use?: The calculator pre-fills the Bank of England Bank Rate (3.75% since 2025-12-18) as an illustrative benchmark, because the Bank Rate guides the rates savings providers offer. Your actual savings rate will differ — easy-access accounts usually pay below it and fixed-term or notice accounts sometimes above it. Enter the rate your provider actually quotes for a precise figure.
Will my savings beat inflation?: Only if your interest rate is higher than inflation. With ONS CPI at 2.8% (2026 MAY) and the Bank Rate at 3.75%, the real (inflation-adjusted) return on a benchmark-rate account is about 0.95 percentage points. Tick "Show value in today's money" in the calculator to see what your future balance is worth after inflation, or use the dedicated beat-inflation page.
Is interest on savings taxed?: It can be. In the UK a Personal Savings Allowance lets basic-rate taxpayers earn some interest tax-free each year, and a cash ISA shelters interest from tax entirely. This calculator shows interest before tax, so a taxed account would grow a little slower. Tax rules depend on your circumstances — this is information, not tax advice.
Does GeraCash pay interest today?: No. GeraCash is pre-launch and operates a waitlist only; it is planned to launch in 2027 with a licensed payment partner. This calculator is a free educational tool that works entirely on the numbers you enter, for any savings account.

Saving across currencies?

GeraCash is building a multi-currency account designed around transparent, mid-market-based rates — so money you set aside in one currency keeps its value when you spend it in another. Join the waitlist for early access when it launches.

Join the waitlist Is your savings beating inflation?

Is your savings beating inflation? — real return on savings, live Bank Rate vs CPI
Methodology & data sources — the exact formulas and the BoE / ONS data behind the defaults
UK interest rate today — the Bank of England base rate
UK inflation calculator — the changing value of money over time

Information only, not financial advice. GeraCash is pre-launch (waitlist only) and is planned to launch in 2027 with a licensed payment partner.