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Savings Interest Calculator

Calculate exactly how much interest your lump sum will earn. Choose compounding frequency, see your tax position, and compare account types.

Basic-rate taxpayers can earn £1,000 of savings interest tax free each year, higher-rate taxpayers £500, and additional-rate taxpayers nothing. Interest inside a Cash ISA is always tax free and does not use that allowance. Money held with an authorised UK bank, building society or credit union is protected by the FSCS up to £120,000 per person per institution — a limit that rose from £85,000 on 1 December 2025.

Your Savings
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Total interest earned
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Final balance
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Tax on interest
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Net interest after tax
Year-by-Year Breakdown
YearOpening BalanceInterest EarnedClosing Balance

Checking the underlying figures. See the Personal Savings Allowance, starting rate for savings and FSCS limit used here, each with its official source and the date UKCalc last checked it, on the 2026/27 rates and thresholds UKCalc uses.

Savings Account Types: Rate & Access Comparison

Account TypeTypical AERAccessTax
Easy-access savings3.5–4.8%Instant withdrawalInterest taxable (PSA applies)
Cash ISA (easy-access)3.3–4.5%Instant withdrawalAlways tax-free
1-year fixed bond4.2–4.9%Locked for 1 yearInterest taxable (PSA applies)
2-year fixed bond4.0–4.7%Locked for 2 yearsInterest taxable (PSA applies)
Cash ISA (fixed)3.9–4.6%Locked for termAlways tax-free
Premium Bonds (NS&I)~4.4% tax-free1 month noticeAlways tax-free (prize draw)
Regular saver5–7%Monthly deposits onlyInterest taxable (PSA applies)

Rates approximate as of mid-2026. Check current rates at your bank or comparison sites.

Personal Savings Allowance (2026/27)

Taxpayer BandIncome ThresholdPSA
Basic rate (20%)Up to £50,270£1,000 tax-free interest
Higher rate (40%)£50,271–£125,140£500 tax-free interest
Additional rate (45%)Over £125,140No PSA (all interest taxable)
Cash ISA holderAny incomeAll interest tax-free, no limit

Confirmed from 6 April 2027: the overall £20,000 ISA allowance is unchanged, but the amount that can be subscribed to a Cash ISA in a tax year becomes £12,000 for people under 65. People aged 65 or over keep the full £20,000 in cash (the higher limit applies from the start of the tax year in which the person turns 65). Current 2026/27 rules continue until 5 April 2027. Full detail: ISA Reform from 6 April 2027.

AER vs Gross Rate

The AER (Annual Equivalent Rate) accounts for compounding — it's the number you should use to compare accounts. The gross rate is the stated rate before compounding is applied. For monthly-compounding accounts, the AER is slightly higher than the gross rate. Always compare using AER.

Frequently Asked Questions

Basic-rate taxpayers can earn £1,000 in savings interest tax-free (Personal Savings Allowance). Higher-rate taxpayers get £500. Additional-rate taxpayers get £0. Cash ISA interest is always tax-free and doesn't use your PSA. If your savings generate more than your PSA, you pay income tax on the excess at your marginal rate.
If your savings interest will stay within your PSA, standard accounts often pay higher rates. If you're likely to exceed your PSA — for instance, a basic-rate taxpayer with over ~£22,000 in savings at 4.5% — an ISA becomes valuable. Higher-rate taxpayers should consider an ISA sooner (PSA exhausted at ~£11,000 at 4.5%). The ISA allowance is £20,000 per tax year.
The Financial Services Compensation Scheme (FSCS) protects up to £120,000 per person per authorised institution — the deposit limit rose from £85,000 on 1 December 2025. Joint accounts are protected up to £240,000. If you have more than £120,000, spread it across multiple FSCS-protected banks. NS&I accounts (Premium Bonds, Income Bonds) are 100% government-backed with no limit.
The Savings Calculator models ongoing regular monthly deposits alongside a starting balance — ideal for building up savings over time. This calculator focuses on a single lump sum deposit at a fixed rate, ideal for comparing fixed-rate bonds, ISAs, or any account where you deposit once and leave it. Use both together to get the full picture.
Most variable-rate savings accounts and easy-access accounts track the Bank of England Bank Rate (3.75% in September 2026). When the base rate falls, easy-access rates typically follow. Fixed-rate bonds lock in a rate regardless of base rate changes. In a falling rate environment, locking in a 1-2 year fixed bond can be advantageous.

Written and reviewed by the UKCalc Editorial Team. UKCalc’s calculators and analysis are built and maintained using verified statutory data and official sources. Published by Animateed Limited. About UKCalc · Editorial policy · Methodology

Last reviewed: 9 August 2026 · Rates: 2026/27 tax year unless stated otherwise.

Rates, assumptions and sources

The tax and protection figures applied here. Official figures last checked on 2 September 2026.

Official figures this calculator applies

UKCalc assumptions — not official figures

Protection is per banking licence, not per account. Brands sharing a licence share one limit — several well-known savings brands sit under the same authorisation. Check the licence, not the brand. NS&I is backed by HM Treasury and is not subject to the FSCS cap. FSCS investment and pension protection remains £85,000 per firm and did not change in December 2025 — FSCS: Banks, building societies and credit unions.