Compound Interest Calculator 2026

Compound interest means you earn interest not just on your original investment, but also on the interest already accumulated. This creates exponential growth over time — often called "the eighth wonder of the world" by Albert Einstein.

More frequent compounding (monthly vs annually) generates slightly higher returns. Monthly compounding at 5% per year slightly outperforms annual compounding at 5%, because interest is added to your balance 12 times per year instead of once.

A quick way to estimate how long it takes to double your money: divide 72 by your annual interest rate. At 6% interest, your money doubles in approximately 72 ÷ 6 = 12 years.

Simple interest is calculated only on your original amount, so you earn the same amount each period. Compound interest is calculated on your original amount plus all previously earned interest, so your earnings grow over time. Compound interest is far more powerful over long periods because you earn interest on your interest.

The more frequently interest compounds — monthly versus annually, for example — the slightly faster your money grows, because interest is added to your balance more often. Monthly compounding produces marginally higher returns than annual compounding at the same headline rate. Our calculator lets you choose monthly, quarterly or annual compounding.

There's no universal answer, but the key insight from compounding is that consistency and time matter more than the amount. Even modest monthly contributions, started early and left to compound, can grow substantially. Use the calculator to test different monthly amounts and see the long-term impact on your final balance.

No — the calculator shows nominal growth before inflation and tax. Real spending power will be lower once inflation is considered, and returns in taxable accounts may be reduced by tax. For tax-free growth in the UK, consider ISAs. Treat the results as a guide to gross growth rather than your exact spendable amount.