Regular Savings Calculator

Work out your regular saver above

Enter your monthly deposit, the annual interest rate (AER) your account advertises and the length of the term, then read off the closing balance and the interest earned. The sections below explain exactly how the maths works, walk through a real example, and flag the things people most often get wrong with regular savers.

What a regular saver actually is

A regular saver is a savings account that rewards you for paying in a fixed amount every month rather than dropping in one big lump sum. Banks and building societies use them to encourage steady saving, and in return they often pay a noticeably higher headline rate than their easy-access accounts. The trade-off is the rules: you usually commit to a set monthly amount, there's a cap on how much you can pay in each month, and the top rate typically lasts for a fixed term of 12 months before the account reverts to something far less generous.

The catch that trips people up is that the advertised rate is not the return on your total deposits. Because you build the balance gradually, your money is only fully invested in the final month. A 7% regular saver does not hand you 7% of twelve months of deposits. The effective return on the cash you put in over the year lands closer to half the headline figure, which is exactly why a dedicated regular savings calculator is more honest than multiplying your yearly contributions by the rate.

How the regular savings calculator works

The principle is simple once you see it. Each monthly deposit earns interest only for the months it actually sits in the account. Your first payment earns interest for the whole term; your last payment earns interest for barely a month. The calculator adds a slice of interest to the running balance each month, then adds your next deposit on top, and repeats.

In plain words, the monthly formula is:

• Monthly interest rate = annual rate ÷ 12
• New balance = (previous balance + this month's deposit) × (1 + monthly rate)

Run that twelve times and the closing figure is your maturity value. The interest earned is simply the closing balance minus everything you paid in:

• Total paid in = monthly deposit × number of months
• Interest earned = closing balance − total paid in

One detail worth knowing: providers quote the AER (Annual Equivalent Rate), which already bakes in the effect of compounding over a year. Dividing the AER by 12 to get a monthly rate is a close, sensible approximation that matches how most people think about their account, and it's the method this calculator uses. The exact penny a bank credits can differ slightly depending on whether they pay interest monthly or only at maturity, and how they count the days, so treat the result as a reliable estimate rather than a guaranteed statement.

If you want to compare this gradual contribution model against putting one amount away on day one, our savings calculator handles lump sums and mixed contributions, while the compound interest calculator shows the underlying growth formula in more detail.

Worked example: Priya's 12-month regular saver

Priya, a teacher in Leeds, opens a regular saver paying 6% AER and decides to pay in £200 on the first of every month for 12 months. She wants to know what she'll have at the end and how much of that is free money from interest.

The monthly rate is 6% ÷ 12 = 0.5% (0.005). Here's how her balance builds:

After 12 months Priya has paid in £200 × 12 = £2,400 and her closing balance is roughly £2,471. So her interest earned is about £71.

Now look at why the headline rate is misleading. Priya might expect 6% of £2,400, which would be £144. She actually gets around £71, roughly half. That isn't the bank short-changing her; it's because the average pound she saved was only in the account for about six months, not a full year. The effective return on the money she contributed is close to 3% over the year, even though the rate on the tin says 6%. That's normal and it's the single most important thing to understand about regular savers.

A second scenario: maxing the monthly cap

Tom saves the full £300 monthly cap into a 7% AER regular saver for 12 months. His monthly rate is 7% ÷ 12 = roughly 0.583%. He pays in £3,600 over the year, and his closing balance comes to about £3,737, giving interest of around £137. Again, that's a long way short of 7% of £3,600 (£252), and for the same reason: the balance only reaches its peak in the final month. Use the calculator above to test your own monthly amount, rate and term rather than relying on the headline percentage.

Regular saver vs lump sum: which wins

If you already have, say, £3,600 sitting in an easy-access account, the honest comparison is not regular saver versus nothing. It's: drip the £3,600 in at £300 a month and earn 7%, or leave it in easy access at a lower rate the whole time. In practice the smart move is often to keep the bulk in a competitive easy-access or fixed account and feed the regular saver from it each month. That way the money waiting to be paid in still earns interest instead of sitting idle. The regular saver's high rate only applies to money that's actually inside it, so a lump sum left outside isn't wasted, it's just earning the lower rate until its turn comes.

Watch the monthly cap, missed payments and the term

Regular savers come with rules that easy-access accounts don't, and they're where the value quietly leaks away:

• Monthly caps are firm. Many accounts cap deposits at £200, £300 or £500 a month. You can't catch up later, so a missed month is interest you never get back.
• Missed or partial payments can break the deal. Some providers reduce your rate or close the bonus if you skip a payment or withdraw early. Read the terms before you commit.
• The headline rate is usually a 12-month promotion. After the term, the account often drops to a stingy variable rate, and your full balance then earns that lower rate. Plan where the money goes at maturity.
• Withdrawals may be restricted. A chunk of regular savers don't allow withdrawals during the term, or they penalise them, so don't park your emergency fund here.

Tax on regular saver interest

Interest from a standard (non-ISA) regular saver counts as savings income, and most people pay no tax on it thanks to the Personal Savings Allowance. For the 2026/27 tax year, a basic-rate taxpayer can earn £1,000 of savings interest tax-free, a higher-rate taxpayer £500, and an additional-rate taxpayer gets £0. Interest above your allowance is taxed at your usual Income Tax rate. Given that even a generous regular saver tends to throw off well under £200 in a year, most savers stay comfortably within the allowance and owe nothing.

If you'd rather shelter the interest completely or you're a higher earner edging towards your allowance, a cash ISA wraps the interest free of tax for good. The ISA allowance is £20,000 per tax year. Our ISA calculator shows how a tax-free wrapper compares, and many providers offer a regular saver as an ISA so you keep the monthly habit and the tax shelter together. Savings tax rules apply UK-wide, so the Personal Savings Allowance and ISA allowance are the same whether you live in England, Scotland, Wales or Northern Ireland, though Scottish residents may pay a different Income Tax rate on any interest that does exceed the allowance.

How much should you save each month

There's no single right number, but a useful starting point is to base your monthly deposit on a goal rather than a percentage. If you want £3,000 for a deposit or a holiday in a year, that's £250 a month before any interest. Set the amount at a level you can keep up every single month, because consistency matters far more than the rate on a regular saver. If your target is a specific sum by a specific date, the savings goal calculator works the monthly figure out for you. Choose an amount you won't be tempted to skip, since a broken month often costs more in lost bonus than a slightly lower rate would.

This regular savings calculator gives estimates for guidance only and is not personal financial advice. Always check the exact terms, rate and tax position of any account before you open it.

Related savings calculators

To plan the bigger picture, try the savings calculator for lump sums and mixed deposits, the compound interest calculator to see how growth builds over the long term, and the savings goal calculator to reverse-engineer the monthly amount you need to hit a target. You can read more about the different types of savings account on the independent, government-backed MoneyHelper guide to savings.

Who should use this calculator

Regular saver accounts pay headline rates well above ordinary savings, and this shows what one actually delivers. The important thing to understand is that the advertised rate is not what you earn on the total: because you pay in monthly, the average balance across the year is roughly half the final amount, so the effective return on the money saved is about half the headline.

That is not a criticism — regular savers are still usually the best home for monthly saving. But it explains why an 8% regular saver on £300 a month produces around £150 of interest, not £288, and it stops the number being a disappointment.

What this calculator assumes

• Deposits are made monthly and interest accrues on the balance as it builds.
• The rate entered is an AER applied across the term.
• The account runs for the full period without withdrawals.
• Interest is normally paid at the end of the twelve-month term.

Limitations — what it does not cover

• Monthly deposit caps, which is how these accounts work — the high rate applies only to a limited amount.
• Missed payment penalties, where some accounts drop the rate or close the account if you skip a month.
• What happens at maturity, when the balance usually moves to a much lower-paying easy-access account.
• Eligibility conditions — many are only open to existing current account customers.
• Tax on interest above your Personal Savings Allowance.
• Withdrawal restrictions, which vary and can be absolute.