Monthly Savings Calculator | Recurring Deposit Interest Calculator UK
Free Monthly Savings | Recurring Deposit Interest UK calculator for the UK. Get instant, accurate results with our easy-to-use online tool. Updated for...
Last updated: February 2026
Monthly Savings Calculator
Calculate the growth of your regular monthly savings with our recurring deposit calculator. See how consistent monthly deposits compound over time with different interest rates and time periods. Also known as an RD (Recurring Deposit) calculator.
Perfect for planning regular savings accounts, monthly ISA contributions, standing orders, or any systematic savings plan. Discover the power of consistent monthly saving.
Calculate Your Monthly Savings Growth
How Monthly Savings Compound
When you make regular monthly deposits into a savings account, each deposit earns interest from the moment it's made. Earlier deposits earn more interest because they're in the account longer. This creates a compounding effect that accelerates your savings growth.
Each Monthly Deposit Grows Separately:
Your first deposit compounds for the full term, your second deposit compounds for one month less, and so on. The final maturity value is the sum of all these individually compounded deposits.
Example: £200/month at 5% for 12 months
| Month | Deposit | Months Earning Interest | Value at Maturity |
|---|---|---|---|
| 1 | £200 | 12 months | £210.23 |
| 2 | £200 | 11 months | £209.35 |
| ... | ... | ... | ... |
| 12 | £200 | 1 month | £200.83 |
| Total | £2,400 | — | £2,464.41 |
UK Regular Savings Accounts
Regular savings accounts in the UK typically offer higher interest rates than instant access accounts, but come with conditions:
| Feature | Typical Terms |
|---|---|
| Interest Rate | 5% - 7% AER (higher than easy access) |
| Monthly Deposit | £25 - £500 per month (varies by provider) |
| Account Term | Usually 12 months fixed |
| Withdrawals | Often limited or penalised |
| Linked Account | Usually requires current account with same bank |
| Missed Deposits | May reduce rate or close account |
Comparing Savings Options
Here's how regular savings compare to other UK savings products:
| Account Type | Typical Rate | Access | Best For |
|---|---|---|---|
| Regular Saver | 5-7% AER | 12-month term, limited withdrawals | Building savings habit, short-term goals |
| Easy Access | 4-5% AER | Instant access | Emergency fund, flexibility needed |
| Fixed Rate Bond | 4-5% AER | 1-5 year fixed term | Known future expense, don't need access |
| Cash ISA | 4-5% AER | Varies (easy access or fixed) | Tax-free interest, higher-rate taxpayers |
| NS&I Premium Bonds | ~4.4% prize rate | Instant access | Tax-free prizes, government guarantee |
Maximising Your Monthly Savings
1. Set Up a Standing Order
Automate your savings by setting up a standing order for just after payday. This "pay yourself first" approach ensures you save before spending.
2. Use the Best Rate Available
Regular saver rates change frequently. Check comparison sites like MoneySuperMarket or MoneySavingExpert for current best buys.
3. Consider Multiple Accounts
If you can save more than one regular saver's maximum, open accounts with different banks to maximise your high-interest savings.
4. Keep Within the Personal Savings Allowance
Basic rate taxpayers can earn £1,000 in interest tax-free annually (£500 for higher rate). Above this, consider Cash ISAs.
Personal Savings Allowance (2025/26):
- Basic rate taxpayers: £1,000
- Higher rate taxpayers: £500
- Additional rate taxpayers: £0
UK Savings Tax Rules You Need to Know
Before opening a regular savings account, it is important to understand how interest income is taxed in the UK. The tax treatment can significantly affect your real returns, particularly if you hold multiple savings accounts.
Personal Savings Allowance (PSA) for 2025/26
The Personal Savings Allowance lets you earn interest tax-free up to certain thresholds depending on your Income Tax band. For the 2025/26 tax year, basic rate taxpayers (earning up to £50,270) receive a £1,000 allowance, higher rate taxpayers (£50,271 to £125,140) receive £500, and additional rate taxpayers (over £125,140) receive no allowance at all. Interest earned above these limits is taxed at your marginal Income Tax rate.
When to Choose a Cash ISA Instead
If your total savings interest across all accounts exceeds your PSA, a Cash ISA becomes valuable. The annual ISA allowance for 2025/26 is £20,000, and all interest earned within an ISA wrapper is entirely tax-free regardless of your tax band. Flexible ISAs also allow you to withdraw and replace funds within the same tax year without losing your allowance. For higher-rate and additional-rate taxpayers, the tax savings from an ISA can be substantial, especially as balances grow over time.
Worked Example: Regular Saver vs Cash ISA
Suppose you save £250 per month for 12 months at 6% AER in a regular saver account. Your total interest would be approximately £97.50. If you are a basic rate taxpayer, this falls well within your £1,000 PSA, so no tax is due. However, if you already earn £950 in interest from other accounts, the additional £97.50 would push you £47.50 over the allowance, resulting in a tax bill of £9.50 at the 20% basic rate. In that scenario, placing the funds in a Cash ISA, even at a slightly lower rate of 5% AER, would protect all your interest from tax and likely leave you better off overall.
Frequently Asked Questions
A recurring deposit is a savings scheme where you deposit a fixed amount at regular intervals (usually monthly) for a set period. In the UK, this is similar to a regular savings account. The term "RD" is more commonly used in India, but the concept is the same: systematic monthly saving with compound interest.
Interest is typically calculated monthly (AER - Annual Equivalent Rate). Each deposit earns interest from when it's made. Your first deposit earns the most interest (full term), while your last deposit earns the least (only 1 month). The total is all these amounts added together.
AER (Annual Equivalent Rate) shows the true annual rate including the effect of compounding. Gross rate is the simple annual rate before compounding. For regular savings with monthly compounding, a 5% gross rate gives approximately 5.12% AER. Always compare accounts using AER for a fair comparison.
Terms vary by provider. Some banks allow missed deposits without penalty, others may reduce your interest rate or even close the account. Always check the terms before opening. Most regular savers require consistent deposits to maintain the higher rate.
Most regular savings accounts restrict withdrawals during the term. Some allow limited withdrawals with notice, while others may reduce your rate or close the account if you withdraw early. Read the terms carefully — if you might need the money, an easy-access account may be more suitable.
It depends on the amount you can save. On a £200/month regular saver at 6% for 12 months, you'll earn about £78 in interest. While the percentage return is attractive, the actual interest earned is modest because your average balance is only half the maximum. Regular savers are excellent for building savings habits but won't make you wealthy on their own.
For most basic rate taxpayers, the Personal Savings Allowance (£1,000) means you can earn interest tax-free in a regular account. ISAs make more sense for: higher-rate taxpayers (only £500 allowance), very large savings, or long-term savings where you want to protect future interest from tax. Consider a regular saver now and transfer to an ISA later if needed.
After the 12-month term, most accounts transfer your balance to a linked savings or current account at a lower interest rate. Plan ahead: you could reinvest in a new regular saver (often with the same bank or a new provider), transfer to a Cash ISA, or move to a fixed-rate bond if you don't need access.
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Expert Reviewed — This calculator is reviewed by our team of financial experts and updated regularly with the latest UK tax rates and regulations. Last verified: February 2026.
Last updated: February 2026 | Verified with latest UK rates
Pro Tips for Accurate Results
- Double-check your input values before calculating
- Use the correct unit format (metric or imperial)
- For complex calculations, break them into smaller steps
- Bookmark this page for quick future access
Understanding Your Results
Our Rd Calculator provides:
- Instant calculations - Results appear immediately
- Accurate formulas - Based on official UK standards
- Clear explanations - Understand how results are derived
- 2025/26 updated - Using current rates and regulations
Common Questions
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Yes, all our calculators are 100% free to use with no registration required.
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