Compound Interest Calculator
Project the future size of your nest egg. Accounts for initial principal, monthly savings (SIP), and inflation.
Growth Projector
Compound AI Engine
Wealth Vision
Visualize your financial future. Enter your savings plan to see the explosive effect of compound growth.
The Power of Compound Interest: Wealth's Greatest Tool
Albert Einstein famously called compound interest the "eighth wonder of the world." It's the process where the interest you earn on an investment earns interest on itself, leading to exponential growth over time. For UK investors, this is the engine behind ISA and SIPP wealth building.
The SIP Strategy
A Systematic Investment Plan (SIP) involves adding a fixed amount to your portfolio every month. Even a small £100 monthly contribution, when compounded at 7% over 30 years, can grow into a substantial nest egg of over £120,000.
Inflation Warning
While compounding makes you "richer" in nominal terms, inflation erodes your purchasing power. If inflation averages 2-3%, your real growth is lower. Our calculator includes an Inflation Adjustment to show you what your money might be worth in "today's prices."
Compounding Frequency Matters
How often your interest is calculated changes the final outcome. The more frequent the compounding (Daily vs. Yearly), the higher the effective yield.
- Yearly: Standard for many UK savings accounts.
- Monthly: Common for mortgages and credit cards, and many investment funds.
- Daily: The most aggressive form of compounding often seen in high-yield cash accounts.
A Long-Term Game
The "Curve" of compound interest starts slow. In the first 10 years, your contributions do most of the heavy lifting. Between years 20 and 30, the interest begins to dwarf the contributions. Patience and time are your biggest allies in the UK stock market.