Compound Interest Calculator
Estimate how your money grows over time with compound interest. Choose compounding frequency and view year-wise projections instantly.
How to calculate compound interest
Enter a lump sum, a rate, a period and how often interest is added, and see how the balance grows year by year.
- 01
Enter the lump sum, rate and time
The calculator starts at ₹1,00,000 for 10 years at 10%. The rate is the yearly rate before tax, from 0 to 100%, and the time can include a fraction, such as 2.5 years.
- 02
Pick how often interest is added
Yearly, half-yearly, quarterly, monthly or daily. Use what your bank or product states; Indian bank FDs usually compound quarterly.
- 03
Read the result and the year-by-year table
You get the final amount, the interest earned, the effective annual yield and the growth multiple, plus the balance at the end of each year.
Worked example: ₹1 lakh at 10% for 10 years
The formula is A = P × (1 + r ÷ n)^(n × t), where P is the principal, r the yearly rate as a decimal, n the number of times interest is added each year and t the years. For ₹1,00,000 at 10% compounded monthly over 10 years: 1 + 0.10 ÷ 12 = 1.008333, raised to the power 120, is 2.707. So the deposit grows to ₹2,70,704, of which ₹1,70,704 is interest.
Simple interest at the same rate would give ₹2,00,000, so compounding adds ₹70,704 over the decade. The gap grows each year, because interest is being earned on the interest already added.
How much compounding frequency really matters
Here's the same ₹1,00,000 at 10% for 10 years with each frequency. The effective annual yield is what the rate works out to once compounding is counted.
| Compounding | Final amount | Interest earned | Effective yield |
|---|---|---|---|
| Yearly | ₹2,59,374 | ₹1,59,374 | 10.00% |
| Half-yearly | ₹2,65,330 | ₹1,65,330 | 10.25% |
| Quarterly | ₹2,68,506 | ₹1,68,506 | 10.38% |
| Monthly | ₹2,70,704 | ₹1,70,704 | 10.47% |
| Daily | ₹2,71,791 | ₹1,71,791 | 10.52% |
Going from yearly to monthly adds about ₹11,000 here. Going from monthly to daily adds only ₹1,087 more. So when comparing two deposits, the headline rate matters far more than the compounding schedule. Compare effective yields, which put both on the same footing.
Doubling time and the cost of waiting
The rule of 72 estimates how long money takes to double: 72 divided by the yearly rate. At 8% it says 9 years, and the exact answer with yearly compounding is 9.01 years. At 12% it says 6 years against an exact 6.12. It's handy for a quick sense of scale without the calculator.
Time does more work than the rate. ₹1,00,000 left at 10% compounded yearly from age 25 to 60 grows to about ₹28.1 lakh. The same amount started at 35 reaches only about ₹10.8 lakh by 60. Ten years less of compounding cuts the result by more than half.
What the calculator leaves out
- Tax. FD interest is taxed at your slab rate in India, and banks deduct TDS above a threshold, so the amount you keep is lower than shown.
- Inflation. At 10% growth and 6% inflation, the real return is about 3.8% a year; ₹2,59,374 after 10 years buys what about ₹1,44,833 buys today.
- Regular contributions. This is for a single lump sum. For monthly investing, use the SIP calculator.
- Rate changes. It assumes the same rate for the whole period, which is true for a fixed deposit but not for market investments.
Using it for a fixed deposit
Indian bank FDs usually compound quarterly when interest is reinvested. A ₹5,00,000 deposit at 7% for 5 years, compounded quarterly, matures at about ₹7,07,389, with ₹2,07,389 of interest. If you chose the payout option instead, taking interest out every quarter, you'd receive only simple interest: ₹1,75,000 over the same five years. The reinvestment option earns ₹32,389 more because the interest keeps earning.