Figures are illustrative only, ignore charges and tax, and are not a forecast or personal recommendation.
This calculator compares two outcomes for the same starting amount: leaving it in a cash savings account at one rate, versus investing it at a different (typically higher, but not guaranteed) assumed rate of return, both left untouched for the same number of years. It's a useful way to put a number on the trade-off between the certainty of cash and the higher expected — but not guaranteed — return of investing.
Why the comparison matters
Cash feels safe because its nominal value can't fall — £10,000 in a savings account is still £10,000 a year later, even in a bad year for the account's interest rate. But "safe" in nominal terms is not the same as safe in real terms: if the savings rate is lower than inflation, the money's purchasing power falls even while the number on the statement stays the same or rises slowly. Investing, by contrast, can lose nominal value in poor years but has historically delivered a higher average return over long periods, at the cost of that volatility. Our guide to cash ISAs versus stocks & shares ISAs covers this trade-off in more detail for tax-wrapped accounts specifically.
How to interpret the result
The calculator simply compounds the same starting amount at two different rates over the same period and shows the difference. A wide gap over a long time horizon illustrates the opportunity cost of holding money in cash rather than investing it — but remember the investment figure is an assumption, not a guarantee, whereas a savings rate is close to guaranteed for as long as it's offered (subject to provider terms and FSCS protection limits).
Worked example
£10,000 held in a savings account at 3% for 15 years grows to a modest amount above the original sum. The same £10,000 assumed to grow at 6% a year — a plausible long-run average for a diversified equity portfolio, though far from guaranteed — produces a considerably larger figure over the same period, illustrating how a few percentage points of extra return compound into a large absolute difference over 15 years.
This isn't a like-for-like risk comparison
It's important not to read this calculator as "investing is simply better" — the investment figure carries risk that the savings figure doesn't. Markets can and do fall, sometimes sharply and for extended periods, and there's no guarantee any specific assumed rate will be achieved. The right split between cash and investments depends on your time horizon, how much of a fall you could tolerate, and how soon you might need the money — covered in our guide to risk tolerance versus risk capacity. Money needed within the next few years is generally better kept as cash regardless of the long-run averages shown here.
Frequently asked questions
What savings rate and investment return should I use?
Use your actual savings account's current rate for the cash side. For the investment side, a cautious long-run assumption (many planners use somewhere in the 4-7% range for diversified portfolios) is more useful than an optimistic recent-year figure.
Does this include tax?
No. Interest and investment gains may both be taxable outside an ISA, subject to your personal allowances — see our guide on Capital Gains Tax on fund holdings for the investment side.
Should I keep some money in cash even if investing "wins" here?
Generally yes — an emergency fund and near-term spending needs are usually better held in cash regardless of the long-run projected gap shown by this calculator.
How does inflation factor into this?
It doesn't directly — both figures here are nominal. Use our Inflation Calculator on each result if you want to see them in today's purchasing-power terms.
Common mistakes in this comparison
The most common mistake is using a single scenario to make a firm decision, when the honest answer is that investment returns are uncertain across a wide range, not a fixed number. It's more useful to run this calculator at a cautious investment return (say, 3-4%), a central estimate (5-6%), and an optimistic one (7-8%), and consider the full range of plausible outcomes rather than anchoring on one figure — especially since real markets don't grow smoothly, and a 15-year period could easily include one or more significant downturns along the way, even if the average works out close to your assumption.
A second mistake is applying this comparison to money with a short time horizon. The historical case for investing outperforming cash strengthens considerably the longer the holding period, but over shorter periods (roughly under 5 years), the risk of investments being down at exactly the point the money is needed is meaningfully higher, which is why short-term goals are generally better funded with cash regardless of what a long-run average comparison like this one suggests.
How many years of data support the "investing usually wins" conclusion?
Long-run historical studies going back many decades broadly support diversified equity investments outperforming cash over multi-decade periods, though this isn't a guarantee for any specific future period, and notable multi-year periods exist where cash or bonds outperformed equities.
What's a sensible way to split money between cash and investments?
A common starting framework is to hold enough cash for a 3-6 month emergency fund plus any money needed within the next few years, and consider investing the remainder if the time horizon and risk tolerance support it.
What if I can't decide and want to do a bit of both?
Splitting new money between cash and investments is a completely valid approach, and often more comfortable than an all-or-nothing decision — you can approximate this by running the calculator with a lower amount reflecting just the investment portion of your total, and tracking the cash portion separately.
Does the comparison change for money inside a pension?
The same growth-versus-stability trade-off applies, though pension contributions also typically receive tax relief regardless of whether the underlying fund choice is cash-like or growth-oriented, which is a separate benefit on top of whatever comparison this calculator shows.