Compound Interest Calculator

See how compound interest turns a single deposit into a growing balance. Adjust the rate, tenure, and compounding frequency to watch how often interest is added changes your final maturity value.

₹1,00,000 at 8% compounded quarterly for 10 years grows to about ₹2.21 L — earning roughly ₹1.21 L in interest on top of your principal.

₹
₹1K ₹1Cr
%
1% 20%
Yr
1 40

Compounding frequency

Value Principal
₹0₹55,201₹1.1 L₹1.66 L₹2.21 LY1Y3Y5Y7Y9Y10

How the Compound Interest Calculator works

Compound interest pays you not just on your original deposit but on all the interest it has already earned. Each compounding period, the interest is added to your balance, and the next period\u2019s interest is calculated on this larger sum. The result is exponential — rather than linear — growth, which is why starting early and staying invested matters so much.

The compound interest formula

  • A = P × (1 + r/n)n×t
  • P — principal (your initial deposit)
  • r — annual interest rate as a decimal
  • n — number of times interest compounds per year
  • t — time period in years

Why compounding frequency matters

The more frequently interest is added, the faster your money grows, because interest begins earning its own interest sooner. This is why a fixed deposit compounded quarterly returns a little more than one compounded annually at the same headline rate. Use the frequency toggle above to see the effect — Yearly, Half-yearly, Quarterly, and Monthly — for your own numbers.

Make compounding work for you

  • Start as early as you can — time is the biggest lever in any compounding calculation.
  • Reinvest interest and dividends rather than spending them, so the base keeps growing.
  • Choose instruments with higher compounding frequency when the rate is otherwise identical.
  • Stay invested through the full tenure — the largest gains always come in the final years.

Frequently asked questions

What is compound interest?
Compound interest is interest earned on both your original principal and on the interest already accumulated. Because each period’s interest is added back to the balance, your money grows at an accelerating pace — often described as "interest on interest." It is the single most powerful force in long-term wealth building.
How does compounding frequency affect returns?
The more often interest is compounded, the more you earn, because interest starts earning its own interest sooner. At the same 8% rate, monthly compounding produces a slightly higher maturity value than quarterly, which beats half-yearly, which beats yearly. The gap is small at low rates but widens as the rate and tenure grow.
How is compound interest calculated?
This calculator uses A = P × (1 + r/n)^(n×t), where P is the principal, r is the annual rate (as a decimal), n is the number of times interest compounds per year, and t is the number of years. The interest earned is simply A minus P.
What is the difference between simple and compound interest?
Simple interest is calculated only on the original principal, so it grows in a straight line. Compound interest is calculated on the principal plus accumulated interest, so it grows exponentially. Over short periods the difference is minor, but over 10–20 years compound interest leaves simple interest far behind.
Which Indian instruments use compound interest?
Most do. Fixed deposits typically compound quarterly, PPF compounds annually, savings accounts compound on the daily balance but pay quarterly, and recurring deposits compound quarterly. Equity mutual funds don’t pay "interest" but deliver compounding through reinvested growth in NAV over time.
What is the Rule of 72?
The Rule of 72 is a quick mental shortcut: divide 72 by the annual interest rate to estimate how many years it takes your money to double. At 8% it takes about 9 years, at 12% about 6 years. It is an approximation that works best for rates between 6% and 15% and assumes annual compounding.
Why does my FD interest get taxed even though it compounds?
Interest on a fixed deposit is taxable on an accrual basis each year at your income tax slab rate, even though it is reinvested and compounds within the FD. Banks deduct TDS at 10% once your interest crosses ₹40,000 in a year (₹50,000 for senior citizens). You can submit Form 15G/15H to avoid TDS if your total income is below the taxable limit.
Does PPF really compound tax-free?
Yes. PPF enjoys EEE (Exempt-Exempt-Exempt) status — your contribution up to ₹1.5 lakh a year qualifies for Section 80C deduction, the interest (currently around 7.1%, compounded annually) is tax-free, and the maturity amount is fully exempt. This makes its effective return far higher than a taxable FD at the same headline rate.
How can I make compounding work harder for me?
Start early and stay invested — time is the biggest lever, since the later years contribute the most growth. Reinvest all interest and dividends rather than spending them, choose a higher (suitable) compounding frequency where offered, and avoid premature withdrawals that reset the snowball. Even a small monthly amount left for 20–30 years can outgrow a larger sum invested late.

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The results shown are estimates for illustration only, based on the inputs and assumptions you provide. Actual returns, interest, and tax depend on market conditions, prevailing rates, and applicable laws, which change over time. This is not investment, tax, or financial advice — please consult a qualified advisor before making decisions.

Maturity value
₹2,20,804
Total interest
₹1.21 L