# What is compound interest?

> Quick answer · Last updated 4 July 2026

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## In short

Interest earned on both your original savings and on interest already added — growth accelerates over time. The formula is often described as 'interest on interest'; the Rule of 72 estimates doubling time.

£10,000 at 5% compounded annually becomes roughly £16,289 in 10 years without further deposits. Monthly compounding slightly increases the total.

Compound interest works against you on debt — credit card balances grow faster when you pay minimum payments only.

Use our savings goal calculator and compound interest guide.

## Related

- [Compound interest explained](https://moneyguide.org.uk/investing/compound-interest-explained/)
- [Savings goal calculator](https://moneyguide.org.uk/tools/savings-goal-calculator/)

## Primary source

gov.uk/individual-savings-accounts

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Independent UK money guidance from [Money Guide](https://moneyguide.org.uk). Information only — not regulated financial advice.