Skip to content
FinanceWith Ease
Change country: United Kingdom

Choose your country

Australia Canada Ireland New Zealand United Kingdom United States

Savings Interest Calculator

See the interest on easy-access savings or a fixed-rate bond, and whether any tax is due after your Personal Savings Allowance.

£
%

The yearly rate the bank quotes

£

Interest you keep

£400.00

After 1 year at 4% AER

Balance at the end
£10,400
Tax on the interest
£0.00
Your balance at the end
  • Money you put in£10,000
  • Interest you keep£400

What this means

After tax, your savings earn about 4.00% a year. With prices rising around 2.5% a year, that’s about 1.5% a year more than inflation.

Shopping around pays: a rate just 0.5% higher would earn you £50.00 more after tax over 1 year.

The Personal Savings Allowance makes the first £1,000 of interest a year tax-free for basic-rate taxpayers and £500 for higher-rate taxpayers. Interest in a Cash ISA is always tax-free.

Next step

Breakdown

PeriodInterestTaxBalance
1 year£400.00£0.00£10,400

What a better rate is worth

  • 3%£300.00 after tax
  • 3.5%£350.00 after tax
  • 4%£400.00 after tax
  • 4.5%£450.00 after tax
  • 5%£500.00 after tax
Assumptions in this estimate
  • The rate stays the same for the whole period. Savings account rates can change at any time; fixed-term rates are set when you open the account.
  • Savings accounts add interest monthly. A fixed-rate bond adds it at the end of the term, or each year on terms over a year.
  • Tax is worked out on each year’s interest and taken from the balance, as when tax is deducted at source.
  • Money added each month goes in at the end of the month.
Spotted a mistake? Tell us

How the calculator works

  1. Amount and rate: what you put in, and the AER.
  2. Type of account: a savings account adds interest monthly, and you can add money each month. A fixed-rate bond fixes the rate for the term.
  3. Tax: pick your tax band. The calculator takes off your Personal Savings Allowance each year, or nothing is taxed in a Cash ISA.

Example

£30,000 at 4% AER for a year:

Basic rate Higher rate
Interest £1,200 £1,200
Tax-free allowance £1,000 £500
Tax on the rest £40 £280
Interest you keep £1,160 £920

Fixed-rate bonds

Some bonds pay all the interest at the end. It’s then taxed in the year it’s paid, which can push it over your allowance in one go. A bond that pays interest each year spreads it out. The calculator adds interest each year on terms over a year.

Getting a better rate

  • Compare AERs: easy-access rates vary a lot, and bonus rates often end after a year.
  • Use a Cash ISA if your interest is near your allowance, or you’re a higher-rate taxpayer.
  • Match the account to the goal: keep your emergency fund in easy access, and fix money you won’t need for a while.

For longer-term growth, try the compound interest calculator.

Last updated

Frequently asked questions

How much interest will £10,000 earn?

At 4% AER, £400 in a year. That’s within the £1,000 Personal Savings Allowance for a basic-rate taxpayer, so there’s no tax to pay.

What is the Personal Savings Allowance?

The interest you can earn tax-free each year: £1,000 for basic-rate taxpayers, £500 for higher-rate taxpayers and nothing for additional-rate taxpayers. If your other income is under £17,570, up to £5,000 more can be tax-free under the starting rate for savings.

What does AER mean?

The Annual Equivalent Rate: what you’d earn in a year, including interest on interest. Every account shows one, so it’s the rate to compare, and the one to enter here.

Is tax on savings changing?

Yes. From April 2027, tax on savings interest rises by 4 percentage points, to 24%, 44% and 49%: Budget 2026 raised it from the 22%, 42% and 47% announced in 2025. The Personal Savings Allowance stays £1,000, or £500 for higher-rate taxpayers, and the Cash ISA limit stays £20,000.

How do I pay tax on savings interest?

Banks pay interest without taking tax off. HMRC uses figures from your bank to change your tax code, or you include the interest in your Self Assessment return.

Is my money protected?

The FSCS protects up to £120,000 per person, per banking licence. Some banks share a licence, so check before splitting savings between brands.