COMPARE SAVINGS ACCOUNTS

Savings calculator guide

If you’re unsure how much interest you’ll earn on your savings, this easy-to-use calculator can help.

All you need to do is input the amount you are looking to save; over what time period and the rate of interest you’ll receive. The calculator will then show you how much interest you’ll earn depending on your tax band – remember, you pay income tax on savings interest (with the exception of money held in a cash ISA as ISAs are tax-free).

How might it help?

If you have money in a savings account, use the calculator to work out how much interest you’re earning. Be warned, you could be in for a shock if you’ve had the account for some time, as the rates on many easy access savings accounts are paying less than the Bank of England base rate. Once you’ve checked your existing account, you can then see how much more interest you could earn by moving your money to one of the current leading savings deals.

The calculator can also be useful if you are trying to decide which savings account to open because you can work out exactly how much interest you’ll earn depending on which deal you go for. For example, you may decide not to go for the highest rate if there’s another account paying slightly lower rate of interest that is more flexible – perhaps it allows unlimited withdrawals compared with the higher-paying deal which might have withdrawal restrictions. On the flip side, you might decide it’s worth relinquishing some flexibility because of the extra interest you’ll earn on a higher paying account.

What do I need to be aware of?

With a fixed rate account it’s easy because your interest rate won’t fluctuate. Also, you can usually only pay money into the account at the time it’s opened and withdrawals aren’t normally allowed during the fixed term. You can therefore use the calculator to work out exactly how much interest you’ll earn over a certain period of time. 

However, if it is an easy access account, the rate will probably be variable, so while the calculator can give you an indication of how much interest you’ll earn bear in mind that the amount of interest you actually receive could be different. Any changes in the interest rate will obviously affect the return (this won’t necessarily be a negative – if the rate rises you could end up with more interest than you were expecting). The total amount of interest you earn will also be affected if you pay additional funds into the account, or take money out.