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Explore our account types and interest rates
You can then enter these rates into the calculator to give you an indication of how much interest you could receive from your savings.
The calculator does not reflect product features or deposit restrictions. You can compare all of your options on our savings accounts page.
ISA stands for Individual Savings Account. Cash ISAs allow you to save up to £20,000 each tax year.
You can earn interest on what you save and this interest will be tax-free, meaning you can keep all of it. Whereas, with a regular savings account you will pay tax on any interest above your PSA.
Since April 2016 interest earned on any savings is paid to you without deducting any tax, but whether you would need to pay tax on your savings or not depends on your PSA.
PSA stands for your Personal Savings Allowance.
Savings interest calculator FAQs
Find answers to common queries and questions about interest and how it works.
How does interest work on a savings account?
Interest is the amount a bank will agree to pay depositors (usually expressed as a percentage rate) in return for deposits placed with them.
There are two types of calculated interest:
Compound – is the interest you earn from your original deposit combined with the interest you’ve earned so far. It means you can keep earning interest on previous years’ interest. For example, if you deposit £1,000 into a savings account that offers a fixed interest rate of 5% and pays interest annually you will earn £50 in interest in the first year giving you £1,050. On the second year if you do not make any withdrawals (including interest) or deposits you will earn 5% interest on £1,050 which means you will earn £52.50 interest and your balance at the end of year two will be £1,102.50. You will have earned interest on your original deposit and also the interest you earned in year one.
Simple – interest is calculated on the original deposit sum only. If you deposit £1,000 into an account that pays 5% you will earn £50 in interest every year, at the end of year two you would have £100.
Your savings account can also have an applicable variable, fixed or tracker interest rate.
Variable – with a variable rate it means that the rate paid could go up or down at the choice of the bank at any time – for example the bank may decide to change the rate to respond to changes in market interest rates or changes in other costs faced by the bank.
Tracker – the rate paid to you could go up or down automatically following a change to the reference rate being tracked – for example a savings product that pays a rate linked to the Bank of England base rate would usually automatically change following a change in the base rate.
Read about our Base Rate Tracker savings account.
Fixed – means the interest rate stays the same throughout the term of the product. They are generally short term deposits ranging anywhere from a month to a few years.
How much interest is tax-free?
Each individual saver has a Personal Savings Allowance which is the amount of interest they can earn tax-free in a tax year. The amount depends on their other taxable income.
You can read more guidance on this on our Personal Savings Allowance information page.
What is the difference between AER and gross interest?
AER stands for Annual Equivalent Rate. It shows what the interest rate would be if interest was paid and compounded over a year.
It is useful for comparing savings accounts because you can see how much interest you will earn over twelve months. The higher the AER, the more interest you’ll earn.
Gross interest is the rate of interest payable before any tax is taken off.
Savings terms explained
AER stands for Annual Equivalent Rate and shows what the interest rate would be if interest were paid and added to your account each year.
Business day is usually Monday to Friday excluding bank holidays.
Calendar month means from midnight on the first day of a month to 11.59:59pm on the last day of the month.
Fixed interest means the rate stays the same until the account matures.
Gross is the rate of interest payable before any tax is taken off.
Tax-free means you will not pay any tax on your interest.
Tax year runs from 6 April to 5 April.
Variable interest means that it could go up or down.
Please note: any reference to tax is based on our understanding of current tax regulations which may change in the future and depend on the customer's individual financial circumstances.
The Co-operative Bank reserves the right to decline or accept any application and/or deposit.
Financial Services Compensation Scheme
Your eligible deposits held by a UK establishment of The Co-operative Bank plc are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK's deposit guarantee scheme. This limit is applied to the total of any deposits you have with The Co-operative Bank and smile. Any total deposits you hold above the limit between these brands are unlikely to be covered.
Please read further information on the FSCS scheme here or visit their website.
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