Monthly savings for £100,000 in 3 years
Two scenarios — zero interest vs 5% AER.
Short answer
£2,778/month cash, or £2,580/month in a 5% AER account.
Breakdown
- Total months: 36
- Cash-only plan: £2,778 × 36 = £100,008
- 5% AER plan: £2,580/month (compound growth does some of the work)
- Interest earned over 3 years at 5%: ~£7,120
Other rates on the same target
- 3% AER (typical easy-access): ~£2,658/month
- 4% AER (competitive easy-access): ~£2,619/month
- 7% (long-run equity tracker): ~£2,504/month — but equities are not appropriate for a horizon under five years
Weekly & daily equivalents
- Per week (cash): ~£642
- Per day (cash): ~£91
- Per week (5% AER): ~£596
If you can only save less
Saving £1,945/month instead — 70% of the target rate — still reaches roughly £70,006 in 3 years (cash) or £70,000 at 5% AER. A smaller amount you sustain every month almost always outperforms a larger pledge that collapses in month four.
Where to keep this money
For a 3-year horizon, a blend of cash ISAs and short-dated gilts/bond funds is sensible. Equities are higher risk on a sub-five-year window but a small allocation can lift the average return. For balances above the £85,000 FSCS limit per institution, spread across providers.
Inflation-adjusted target
At 3% long-run inflation, £100,000 in 3 years' time is worth roughly £91,514 in today's money. To preserve real purchasing power you'd actually need to hit £109,273 in 3 years — about £258/month extra on the cash plan. A 5% AER account broadly keeps pace with inflation; a 3% account does not.