Money Saving Expert Best Savings Accounts UK

Compound Interest Formula:

\[ FV = P \times (1 + \frac{r}{n})^{(n \times t)} \]

Principal Amount (P):

GBP

Annual Interest Rate (r):

Compounding Periods Per Year (n):

Time Period (t):

years

Future Value (FV):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is Compound Interest?

Compound interest is the interest calculated on the initial principal and also on the accumulated interest of previous periods. It allows savings to grow at an accelerating rate over time, making it a powerful tool for long-term wealth building.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

\[ FV = P \times (1 + \frac{r}{n})^{(n \times t)} \]

Where:

\( FV \) — Future Value (GBP)
\( P \) — Principal Amount (GBP)
\( r \) — Annual Interest Rate (decimal)
\( n \) — Compounding Periods Per Year
\( t \) — Time in Years

Explanation: The formula calculates how much your savings will grow based on your initial deposit, interest rate, compounding frequency, and time period.

3. Importance of Savings Calculation

Details: Understanding compound interest helps you make informed decisions about savings accounts, investment strategies, and financial planning for future goals.

4. Using the Calculator

Tips: Enter your initial deposit in GBP, annual interest rate as a percentage, select compounding frequency, and time period in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What are the best savings account rates in the UK?
A: As of September 2025, Money Saving Expert reports rates up to 4.75% for the best savings accounts, though rates vary by provider and account type.

Q2: How often should interest be compounded?
A: More frequent compounding (e.g., monthly vs annually) results in higher returns. Daily compounding typically offers the best returns.

Q3: Are savings accounts safe?
A: In the UK, savings up to £85,000 per person per financial institution are protected by the Financial Services Compensation Scheme (FSCS).

Q4: Can I withdraw money from a savings account?
A: This depends on the account type. Easy access accounts allow withdrawals, while fixed-term accounts may restrict access or charge penalties.

Q5: How does inflation affect savings?
A: If your interest rate is lower than inflation, the real value of your savings decreases over time. Aim for rates that outpace inflation.