Fixed-Rate Savings Calculator
Estimate what a lump sum could earn in a fixed-term savings bond, and how the way interest is paid changes the result.
Enter your deposit, the AER and the term, then choose how often interest is paid and whether it stays in the account. Calculated instantly in your browser.
Your estimated return
Same deposit, different interest arrangements
Bonds with the same AER don’t all pay the same amount: interest that’s paid away can’t earn interest itself. Your selected arrangement is highlighted.
| Interest arrangement | Interest earned | Left in the bond at maturity | Total received |
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Calculation breakdown
Each interest payment over the term.
| Period | Balance at start | Interest | Paid out | Balance at end |
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How fixed-rate interest is calculated here
A fixed-rate bond locks your deposit away for a set term at a rate that doesn’t change. Providers quote the rate as an AER, but they differ in how often they pay interest and whether it stays in the bond. This calculator follows each arrangement separately:
- Monthly, added to the bond: interest is credited every month at the monthly rate that compounds to the AER, (1 + AER)1/12 − 1.
- Annually, added to the bond: interest of exactly the AER is credited every 12 months. If the term includes a part-year, interest for those months is credited at maturity on a simple, pro-rata basis.
- At maturity: a single payment at the end, sized so the effective annual rate equals the AER: deposit × ((1 + AER)years − 1).
- Paid to another account: each interest payment is worked out on the original deposit and paid away, so it never earns interest of its own.
AER and gross rates
Bonds that pay monthly interest often quote two rates, such as “4.17% gross / 4.25% AER”. The gross rate is the nominal yearly rate that’s divided into monthly payments; the AER shows what that would amount to over a year if every payment were left to compound. This calculator works from the AER, which is the figure designed for comparing accounts, and shows the gross equivalent for monthly interest.
Before you lock money away
- Access: many fixed-rate bonds don’t allow withdrawals before maturity, or charge a penalty — often a number of days’ interest — if they do. Check the terms before you commit.
- Tax: interest is shown before tax. It counts towards your Personal Savings Allowance, and interest is generally taxed in the tax year it’s paid or credited to you, so a bond that pays everything at maturity can put a larger amount of interest into a single tax year.
- Protection: the Financial Services Compensation Scheme (FSCS) protects eligible deposits up to £120,000 per person, per authorised bank or building society. That limit is shared across all your accounts with the same firm, including brands that share a banking licence.
- Product terms vary: some providers calculate interest daily, pay on specific dates or round differently, so actual figures can differ slightly from these estimates.
Sources
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GOV.UK — Tax on savings interest: how much is tax-free
The Personal Savings Allowance (£1,000 basic rate, £500 higher rate, £0 additional rate) and the starting rate for savings of up to £5,000.
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FSCS — Deposit protection limit increase
The FSCS deposit protection limit rose to £120,000 per eligible person, per authorised firm, on 1 December 2025.
Frequently asked questions
Is monthly or annual interest better on a fixed-rate bond?
If two bonds have the same AER and you leave the interest in the bond, they should end up close to the same amount — that is what the AER is designed to show. Monthly interest mainly suits people who want an income from their savings; if it is paid out to another account, it no longer compounds.
What is the difference between AER and gross rate?
The gross rate is the nominal annual rate before compounding. The AER shows the effect of compounding over a year, so for monthly interest the AER is slightly higher than the gross rate. Use the AER when comparing accounts.
Can I withdraw money from a fixed-rate bond early?
Often not. Many fixed-rate bonds don’t allow access until maturity, and those that do usually charge a penalty, commonly a set number of days’ interest. This calculator assumes the money stays in for the full term.
Do I pay tax on fixed-rate bond interest?
Interest is taxable, but it is covered first by your Personal Savings Allowance (and the starting rate for savings if your other income is low). Interest is generally taxed in the year it is paid or credited, which matters for bonds that pay all their interest at the end.
Is my money protected?
Eligible deposits with UK-authorised banks and building societies are protected by the FSCS up to £120,000 per person per authorised firm. Check whether the provider is covered and whether it shares a licence with another brand you already save with.