- Maturity value
- ₹1,41,478
- Interest earned
- ₹41,478
- Simple interest would be
- ₹35,000
- Effective yearly rate
- 7.19%
Principal: ₹1,00,000 (70.7%)Interest: ₹41,478 (29.3%)
| Year | Compound value | Simple value | Difference |
|---|---|---|---|
| 1 | ₹1,07,186 | ₹1,07,000 | ₹186 |
| 2 | ₹1,14,888 | ₹1,14,000 | ₹888 |
| 3 | ₹1,23,144 | ₹1,21,000 | ₹2,144 |
| 4 | ₹1,31,993 | ₹1,28,000 | ₹3,993 |
| 5 | ₹1,41,478 | ₹1,35,000 | ₹6,478 |
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Please note: this calculator is a free aid for working out numbers, not financial, tax or investment advice. It has not been prepared or checked by a chartered accountant or financial adviser, and results may be inaccurate for your situation. Check important decisions with a qualified professional.
How to use Compound Interest Calculator
- Enter the amount, the yearly interest rate and the number of years.
- Choose how often interest is compounded: fixed deposits in India often compound quarterly.
- Compare the maturity value with what simple interest would give, and check the effective yearly rate.
The compound interest formula
A = P × (1 + r ÷ n)^(n × t), where P is the starting amount, r the yearly rate as a decimal, n the number of times interest is added per year and t the number of years. Interest earned is A − P.
Simple interest pays only on the original amount: P × r × t. Compounding pays interest on earlier interest too, so the gap widens every year.
The effective yearly rate, (1 + r ÷ n)^n − 1, lets you compare offers that compound at different frequencies: 8% compounded quarterly is really 8.24% a year.
Worked example
₹1,00,000 at 10% a year, compounded yearly, for 5 years: 1,00,000 × 1.1^5 = ₹1,61,051. Simple interest over the same period gives ₹1,50,000, so compounding earns an extra ₹11,051.
Frequently asked questions
How often do Indian bank FDs compound?
Many banks compound fixed-deposit interest quarterly, but terms vary by bank and by deposit type. Check your deposit's terms and choose the matching option.
Does more frequent compounding make a big difference?
It helps, but less than the rate or the time invested. Going from yearly to monthly compounding at 8% raises the effective rate from 8% to about 8.30%.
Is tax on interest included?
No. Interest on deposits is usually taxable, and TDS may be deducted, so your take-home amount can be lower.
Does it work for loans too?
It shows how a debt grows if nothing is repaid. For loans you repay monthly, use the EMI calculator instead.