CalculatorsSwitch calculator
How this works
You tell the calculator what you’re aiming for, what you’ve already put aside and either how much you can save each month or when you want to get there. It then works forwards month by month: interest is added to the balance, and your monthly amount goes in at the end of the month.
If you choose a monthly amount, it counts how many months it takes for the balance to reach your goal, rounded up to a whole month. If you choose a deadline, it runs the same sum the other way round and finds the monthly amount that lands you exactly on the goal.
What it assumes
- The rate you enter is an AER and stays the same the whole time.
- You save the same amount every month, at the end of the month.
- Tax on interest is left out. Most savers pay none, thanks to the Personal Savings Allowance or an ISA.
Worked example
Saving £5,000 for a house deposit fund
- You start from nothing and put away £200 a month in an easy-access account paying 4% AER.
- You reach £5,000 in 2 years 1 month. By then you’ve paid in £5,000 and earned £201.44 in interest, so the balance is £5,201.44.
- That’s about £6.58 a day.
- If you’d rather hit £5,000 in 18 months, you need £270.13 a month instead, or about £8.88 a day.
Worked out with the same maths as the calculator above.
What to do next
Common questions
Why does a higher interest rate make so little difference to short goals?
Over a year or two most of the balance is money you’ve paid in, so interest only adds a little. In the example above, 4% AER adds about £200 to a £5,000 goal. The rate matters more the bigger the balance and the longer you leave it.
Should I save monthly or set a deadline?
Use the monthly option if you know what you can afford and want to see when you’ll get there. Use the deadline option if the date is fixed, such as a wedding or a holiday, and you need to know what it will take each month.
What if I can’t save the same amount every month?
Enter the amount you can manage in an ordinary month. If you get a bonus or a tax refund, add it to what you’ve already saved and run the numbers again. The new date will move closer.
Do I pay tax on the interest?
Probably not. Basic-rate taxpayers can earn £1,000 of interest a year tax-free and higher-rate taxpayers £500. Interest in a cash ISA is always tax-free.