Name the rate you are using
Our compound interest tool uses a nominal annual rate divided by 12, with monthly compounding. A published AER already incorporates a compounding assumption. Entering it as a nominal rate would not exactly reproduce the advertised AER. Check the product’s rate definition first.
Choose when money is added
The tool adds regular contributions at the end of each month, after that month’s interest. A contribution at the beginning of the month has longer to earn interest. Check payment timing when comparing a calculator projection with an account’s illustration.
Separate contributions from growth
A large final balance can reflect regular saving as well as interest. Read the contributions and growth lines together so you do not mistake your own deposits for investment performance. Try a zero-rate scenario to see the amount that comes entirely from contributions.
Keep real-world uncertainty visible
The projection holds the rate constant and excludes tax, fees and inflation. It is a mathematical illustration, not a forecast or recommendation. Variable rates and investment returns can change, and investment values can fall. Use the tool to understand relationships before assessing any actual product.
Sources & methodology
This page uses original budgeting guidance and transparent arithmetic. Example prices are chosen illustrations, not a survey of UK market prices. Replace them with written quotations.
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