Savings interest calculator
Savings account summary
With an initial deposit of £5,000 and monthly contributions of £100 for 5 years at an annual interest rate of 3.00%, your savings could grow to £12,274. That's a total contribution of £11,000, with interest earnings of £1,274. It's a secure way to build up your savings over time.
Here's a closer look:
- You start with an initial deposit of £5,000.
- Adding £100 each month for 5 years totals £6,000 in contributions.
- Your total balance grows to £12,274, where £1,274 is the result of interest compounded daily.
- Contributions
- Growth
Compound interest
The strength of a savings account lies in the power of compound interest. This means that the interest you earn each period is added to your principal, forming a new base for future interest calculations. Over time, this results in exponentially increasing your savings.
For instance, with a 3.00% annual interest rate (compounded daily) over 5 years, you'll see your savings gradually increase due to the compounding effect. Initially, the interest amounts might seem modest, but as your balance grows, even small percentage gains become significant amounts.
Year-by-year savings breakdown
| Year | Balance | Total Contributions | Total Growth |
|---|---|---|---|
| 0 | £5,000 | £5,000 | £0 |
| 1 | £6,369 | £6,200 | £169 |
| 2 | £7,780 | £7,400 | £380 |
| 3 | £9,233 | £8,600 | £633 |
| 4 | £10,731 | £9,800 | £931 |
| 5 | £12,274 | £11,000 | £1,274 |
Frequency of contributions
- Regular monthly contributions are key in a savings plan. Increasing your monthly contribution to £200 can raise your total balance at the end of 5 years to £15,484, demonstrating the impact of saving more frequently.
- Duration of savings: Extending the duration of your savings can significantly increase the total interest earned. For example, saving over 10 years, instead of 5, could increase your total balance to £20,664, showing the dramatic effect of longer compounding periods.
Safety and Predictability
Unlike investments in the stock market, a savings account can offer a fixed interest rate, providing stability and predictability. Your principal is safe, and the growth through interest is guaranteed as per the terms of your account, making it a reliable option for managing part of your financial portfolio.
The FSCS guarantees your money up to £85,000 per person, per institution. Joint accounts have protection up to £170,000. Find out here if your bank or building society is covered by checking the Financial Services Register.
Savings interest calculator
Savings account summary
With an initial deposit of £5,000 and monthly contributions of £100 for 5 years at an annual interest rate of 3.00%, your savings could grow to £12,274. That's a total contribution of £11,000, with interest earnings of £1,274. It's a secure way to build up your savings over time.
Here's a closer look:
- You start with an initial deposit of £5,000.
- Adding £100 each month for 5 years totals £6,000 in contributions.
- Your total balance grows to £12,274, where £1,274 is the result of interest compounded daily.
- Contributions
- Growth
Compound interest
The strength of a savings account lies in the power of compound interest. This means that the interest you earn each period is added to your principal, forming a new base for future interest calculations. Over time, this results in exponentially increasing your savings.
For instance, with a 3.00% annual interest rate (compounded daily) over 5 years, you'll see your savings gradually increase due to the compounding effect. Initially, the interest amounts might seem modest, but as your balance grows, even small percentage gains become significant amounts.
Year-by-year savings breakdown
| Year | Balance | Total Contributions | Total Growth |
|---|---|---|---|
| 0 | £5,000 | £5,000 | £0 |
| 1 | £6,369 | £6,200 | £169 |
| 2 | £7,780 | £7,400 | £380 |
| 3 | £9,233 | £8,600 | £633 |
| 4 | £10,731 | £9,800 | £931 |
| 5 | £12,274 | £11,000 | £1,274 |
Frequency of contributions
- Regular monthly contributions are key in a savings plan. Increasing your monthly contribution to £200 can raise your total balance at the end of 5 years to £15,484, demonstrating the impact of saving more frequently.
- Duration of savings: Extending the duration of your savings can significantly increase the total interest earned. For example, saving over 10 years, instead of 5, could increase your total balance to £20,664, showing the dramatic effect of longer compounding periods.
Safety and Predictability
Unlike investments in the stock market, a savings account can offer a fixed interest rate, providing stability and predictability. Your principal is safe, and the growth through interest is guaranteed as per the terms of your account, making it a reliable option for managing part of your financial portfolio.
The FSCS guarantees your money up to £85,000 per person, per institution. Joint accounts have protection up to £170,000. Find out here if your bank or building society is covered by checking the Financial Services Register.