A regular saver's headline rate applies to each pound only for the months it is present. The month-by-month arithmetic, to the penny, with a comparison.
A regular saver advertising 7% does not pay 7% of what you deposit over the year — and nothing is wrong when it does not. Paying in £200 a month puts £2,400 in over twelve months and earns £76.06 of interest: an effective 3.17% of everything deposited, because each pound is only in the account for the months it is present. The first deposit earns interest for eleven months; the twelfth earns none. The calculator below prints the month-by-month table so the arithmetic is checkable to the penny, and compares the same deposits against an easy-access rate you set.
The monthly amount, the regular saver's headline rate, and an easy-access rate to compare. Both rates are examples until you change them.
| Month | Interest | Balance |
|---|---|---|
| 1 | £0.00 | £200.00 |
| 2 | £1.13 | £401.13 |
| 3 | £2.27 | £603.40 |
| 4 | £3.41 | £806.81 |
| 5 | £4.56 | £1,011.37 |
| 6 | £5.72 | £1,217.09 |
| 7 | £6.88 | £1,423.97 |
| 8 | £8.05 | £1,632.02 |
| 9 | £9.23 | £1,841.25 |
| 10 | £10.41 | £2,051.66 |
| 11 | £11.60 | £2,263.26 |
| 12 | £12.80 | £2,476.06 |
The 7% headline applies to each pound only for the months it is present: the first deposit earns interest for eleven months, the last for none. That is why £2,400.00 paid in earns £76.06 — an effective 3.17% of everything deposited, not 7% of it. The table above is the arithmetic, month by month.
The same deposits in an easy-access account at 4% earn £43.68 — the gap between the two accounts is £32.38 over the year, not the difference the headlines suggest.
Deposits are added at the end of each month, after that month's interest. Both rates are yours to set, not market rates. A planning estimate, not financial advice.
| Tax/source year | 2026/27 |
|---|---|
| Region | UK-wide: savings interest is taxed on the UK bands and thresholds in every UK nation, including for Scottish taxpayers |
| Account rates | Never assumed. Any interest rate in a savings calculation is an input you set, stated beside the result. |
| Your other income | Wages and pension income decide how much Personal Allowance and starting rate are left for interest, and which Personal Savings Allowance band applies. |
|---|---|
| The interest itself | Interest counts towards the income that sets your band, so a large interest year can shrink the allowance that was meant to cover it. |
| The account's wrapper | The same balance at the same rate is taxed outside an ISA and untouched inside one; the wrapper, not the rate, decides whether the allowances are needed. |
| What is not decided here | PayBreakdown does not decide payroll correctness, lender approval, benefit entitlement or employer compliance, and does not give regulated financial, mortgage, debt, tax, payroll or legal advice. |
|---|
The headline rate is an honest annual rate — applied to each pound for the time that pound is actually there. In a regular saver the money arrives gradually, so the average balance across the year is roughly half the final total, and the year's interest lands near half of what the headline suggests when misread as "rate times deposits". The month-by-month table above shows the mechanism directly: early months earn pennies on a small balance, later months earn most of the interest.
The practical comparison is never headline against headline. £200 a month at 7% earns £76.06; the same deposits at 4% easy access earn £43.68. The real gap is £32.38 over the year — worth having, and much smaller than the three-point difference in the advertised rates reads.
Regular savers usually run for exactly twelve months and then convert to an ordinary account — the calculator models the twelve months and stops. Missed-month rules, caps that differ by provider, and what the balance converts into afterwards are not modelled. Interest here is before any tax; for most people a regular saver's interest sits well inside the Personal Savings Allowance, and the savings interest tax calculator works the exact position. Neither rate on this page is a market rate: both are examples you overwrite.
Change any figure above and the result moves with it. A payslip can differ from any calculator because payroll works pay period by pay period, so a tax-code change, a bonus, arrears or a refund can land in one month and not the next. See how each deduction is worked out.
No — the rate is real, applied fairly to money actually in the account. The disappointment comes from misreading it as a rate on the year's total deposits. Read the effective-return figure this calculator prints and the account can be compared honestly with anything else.
If you already have the lump sum, often yes — a full balance earning from month one can beat a drip at a higher rate, and a regular saver usually cannot take the lump sum on day one anyway. The comparison row on this page deliberately keeps to like-for-like: the same monthly drip at both rates. Run the lump sum through the savings calculator to see its side.
The calculator adds deposits at the end of each month, after that month's interest — so the first deposit's first interest arrives in month two. Providers vary in the exact day money starts earning; the convention here is stated so the table can be checked to the penny.
Last updated 2026-08-28. Checked by Sean Elsmore. Rates last checked against GOV.UK on 2026-08-07. Estimates are for planning and should be checked against official records where the decision matters.