Find out how much your Cash ISA could be worth in the future.
Yearly contributions
£2,400
(per year)
Make interest on your savings and open a Cash ISA, or invest your money sensibly over time with a Stocks and Shares ISA.
Our Nuts About Money Cash ISA calculator is here to help you plan your projected cash savings, and how much it will be worth in the future.
Cash savings are great as an emergency fund, should something happen like losing your job – but they’re not necessarily the best place for any savings over the long term, for instance your life savings if you have any. We’ll cover this in just a bit.
With our calculator, we’ve planned for compound interest in our calculations, which is the interest you make earning more interest itself, and this snowballs each year (compounds) – and it’s this which means over time, small amounts of money can grow very large (Einstein called this the 8th wonder of the world).
For cash savings, most advertised interest rates are AER (Annual Equivalent Rate), which is how much you’ll make in a year’s time (e.g. 3% of your savings by this time next year), this includes the monthly interest compounding – so the interest you make every month makes a little bit of interest itself the following months, rather than receiving the all the interest at the end of each year (although it does happen this way too).
Note: the alternative to AER is gross rate, and is how much the account pays with no compounding interest added.
We also haven’t planned for you to withdraw any cash either – which will significantly reduce the impact on compound interest, depending on how much you withdraw (so try not to withdraw it until you really need it).
And as it’s an ISA, we’ve ignored any tax you might otherwise have paid (as ISAs are tax-free) – more on ISAs below.
This is how much you’ve got in your Cash ISA account already.
This is how much you are intending to save per month into your Cash ISA.
The most you can save into a Cash ISA is £20,000 per year, so you’re able to save £1,667 per month (this £20,000 is your ISA allowance, and applies as a total across all of your ISAs).
Nuts About Money tip: if you’re planning to save more, and thinking about retirement, a pension can be a great idea, use our pension calculator to learn more and plan ahead. You can also invest more into a regular investing account, where you’ll pay tax on your profit.
This is how long you intend to keep your savings for – and you can save up to 40 years with our Cash ISA calculator. If you’re intending to save for longer, such as for retirement, you might want to consider a personal pension.
This is how much interest you’ll get each year in return for keeping your savings with a bank or financial company (more on interest below). This is for a Cash ISA (more on those below).
Interest is what you earn from depositing your cash with a financial company (normally a bank, but it doesn’t have to be). In return for you storing your money with them, they give you a bit of money back, called interest.
You get interest because they make money from your money. They can do a wide range of things with it, such as loan it out to other people and businesses in exchange for higher interest rates than they give you.
Or, they can deposit some of their money with the Bank of England, who pay them interest, which is called the base rate (a higher interest rate than you’ll get from your deposit with a bank).
Cash ISAs are currently great for keeping your cash working for you – and you can earn interest in return for storing your money with a provider (such as a bank). You’ll earn interest either daily, monthly or annually (depending on the type of account you get), and your interest will be tax-free.
Nuts About Money tip: here’s our picks for the best Cash ISAs.
If it wasn’t tax-free, you’d likely pay the same amount of tax as you do on your salary, so between 20-45% on the amount of interest you make, depending on your total income (20% tax on income between £12,570 and £50,270)...
However, you do have an allowance where you are allowed to earn a certain amount of interest each year before you have to pay tax on it, called the Personal Savings Allowance…
If you have an income of less than £17,570, you get an extra £5,000 allowance before you have to pay any tax on your interest, called the ‘starting rate for savings’, which means any interest that puts your annual income up to £17,570 is tax-free (up to a maximum of £5,000 in interest). If you earn underneath £12,570 it’s tax-free anyway.
What that means is you don’t necessarily have to save within a Cash ISA, you can still earn interest tax-free from a regular cash savings account.
Nuts About Money: here’s our picks for the best savings accounts.
Cash savings accounts (whether ISA or not) are a great option for things like emergency savings, and to save for things that you’ll pay for in the short term (typically under 5 years).
For longer term savings (such as lifelong savings), Stocks and Shares ISAs are typically seen as a better option to increase your money over time (below).
You might want to consider a Stocks and Shares ISA. This is where your money is invested in, you guessed it, stocks and shares, with the aim of growing your money over time. And it’s all tax-free.
If done right, they’re not as complicated or risky as they might seem, and can significantly increase your savings over time, potentially much more than interest from a cash savings account – and you can simply let the experts handle the investments (meaning you don't need to know much about investing).
Shares represent part ownership of a company (you own a share of a company), and they have a value (e.g. £100), and when a company does well and grows, this value can increase (e.g. to £120), and therefore your investment increases.
Most investment strategies would include owning thousands of different shares (companies), often by being invested in what’s called a fund, which is a large group of shares or similar kind of investments to shares (like loans to governments called bonds). This reduces a lot of the risk of your money falling in value significantly, and helps your money grow over time. Depending on how much it grows will usually depend on the level of risk you’re happy with, and the type of investment you’d like.
Your money will always go up and down day-to-day, but over time (e.g. over 5 years or more), and with the right investment strategy, it would typically grow fairly significantly (although there’s never any guarantees).
You can simply leave the experts to manage the investment side of things with a managed Stocks and Shares ISA (recommended), and leave your money to grow over time. Or, if you’re more confident with investing, you can manage your own investments within a self-managed ISA.
Nuts About Money tip: for all the top options for Stocks and Shares ISA, head over to our best investment platforms table.
If you’re saving for your first home, you could consider a Lifetime ISA instead of, or alongside a Stocks and Shares ISA.
A Lifetime ISA, or LISA, is a government scheme to help you save your first home, although they can also be used for later in life if you don’t want to use it for your first home (after 60 years old).
With a LISA, you can save up to £4,000 per tax year (April 6th to April 5th the following year), and you'll benefit from a massive 25% bonus from the government on everything you save into it, so up to £1,000 free each year.
Your money will grow tax-free, so there’s no tax to worry about either, so it can grow much more over time.
You can use the money towards your first home, as long as you’re a first time buyer (so haven’t bought a home before), and the property has to be under £450,000. You also have to live in it (so not a buy to let).
However, there are some rules to open one, you need to be at least 18 years old, and be under 40. You can also only save into one until you’re 50.
And if you don’t end up using your LISA for your home, if you want to withdraw your money from your account, you’ll face a hefty 25% fee, which works out as more than the 25% bonus (it sounds odd, but the maths works out). Or, you can wait until you’re 60 years old, when there’s no penalty fee.
Nuts About Money tip: check out our Lifetime ISA calculator to plan your LISA savings.
If you’re saving for retirement, you also might not want to use a Cash ISA…
You also have the option of a pension, which you’ll likely be familiar with if you have a job, but you can also save into your own pension, called a personal pension, alongside your pension from work.
With these, you’ll automatically get a 25% government bonus on everything you save into one, which is to refund tax you’ve paid on your income (at 20% tax rate), called tax relief.
And if you earn over £50,270, and pay 40% or 45% tax, you’ll also get this tax back too (which you do by claiming on a Self Assessment tax return).
Your money grows tax-free too, and when it comes time to retire and withdraw from it, you can withdraw 25% completely tax free (as long as the 25% is under £268,275).
You can save up to £60,000 per year, or up to your total income each year (e.g. your salary), whichever is lower, as a total across all your pensions.
And, they don’t count towards any Inheritance Tax that might be paid when you sadly pass away.
Anyway, we won’t go into all the details right now, but you can learn more with our guide personal pensions, or if you’re keen to get started, here’s our guide to the best private pensions. Oh, and try our pension calculator too.
Christopher Dowling combines a communications degree with over 10 years experience in the financial services industry in London – with focus on educating people on a wide range of money topics in an easy to understand way. He writes about savings, investing, pensions, mortgages, insurance, banking, loans, business finance and other money topics.
This article was written, reviewed and fact checked by the expert team at Nuts About Money. You’re in safe hands. Learn more.
We're experts in all things savings, with many years of combined experience writing and talking about savings (and ISAs). Some of our team were top financial advisors. We understand the ins and outs of planning your finances well, how to communicate savings in an easy to understand way (we hope you agree), and of course, how to get the best savings rate for you.
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