Compound Interest Calculator
See the true power of compounding. Calculate the maturity value, total interest earned and year-by-year growth of your savings — with optional monthly contributions and any compounding frequency.
Calculate Your Compound Growth
Enter your investment details below. Works for fixed deposits, savings accounts, recurring investments and any compounding instrument.
What Is Compound Interest?
Compound interest is the interest you earn on your original investment plus the interest that has already been added to it. In other words, your interest starts earning its own interest. This is fundamentally different from simple interest, which only ever pays you a return on the original principal. The compounding effect may look modest in the early years, but it becomes extraordinary over long periods — which is exactly why starting early matters far more than investing large amounts later.
The Compound Interest Formula
For a lump-sum investment, the maturity amount is calculated as:
A = P × (1 + r/n)n×t
- A = final maturity amount
- P = principal (initial investment)
- r = annual interest rate (as a decimal, so 8% = 0.08)
- n = number of times interest is compounded per year
- t = number of years
The total interest earned is simply A − P. When you also make regular monthly contributions, there is no single closed-form formula that fits every case, so this calculator iterates month by month — adding each deposit and applying interest at every compounding period — to give you a precise result.
Why Compounding Frequency Matters
The more often interest is compounded, the faster your money grows, because each interest payment begins earning its own interest sooner. Consider ₹1,00,000 invested at 10% for 10 years: with annual compounding it grows to about ₹2,59,374, but with monthly compounding it reaches roughly ₹2,70,704. That extra ₹11,000-plus appears purely from compounding more frequently — without investing a single extra rupee. Most Indian bank fixed deposits compound quarterly, savings accounts often compound monthly, and PPF compounds annually.
Worked Example
Suppose you invest ₹2,00,000 at 9% per year, compounded quarterly, for 15 years. Each quarter the balance grows by 9% ÷ 4 = 2.25%, applied 60 times over the tenure. The investment grows to approximately ₹7,58,000 — meaning you earn over ₹5,58,000 in interest on a ₹2,00,000 investment. Now add a ₹5,000 monthly contribution and the final corpus climbs past ₹25 lakh, illustrating how combining a lump sum with disciplined monthly investing supercharges your wealth.
The Power of Starting Early
Time is the single most powerful ingredient in compounding. An investor who puts away ₹10,000 a month from age 25 to 35 (just 10 years) and then stops will often end up with more at age 60 than someone who invests the same amount from age 35 to 60 (25 years) — simply because the early money had decades longer to compound. The lesson is clear: the best time to start was yesterday; the second best time is today.
Common Uses of This Calculator
- Fixed Deposits: Estimate FD maturity value with quarterly compounding.
- Recurring savings: Model the growth of regular monthly contributions.
- Goal planning: Work out how much a target corpus will be worth at retirement.
- Comparing options: See how a small difference in interest rate compounds into a large difference over time.
- Understanding debt: The same maths shows how credit-card balances balloon when interest compounds against you.
Simple vs Compound Interest
With simple interest, ₹1,00,000 at 10% for 20 years earns ₹2,00,000 in interest (₹10,000 × 20), for a total of ₹3,00,000. With annual compound interest, the same investment grows to about ₹6,72,750 — more than double the simple-interest outcome. The gap widens dramatically with time, which is why nearly every long-term wealth-building strategy relies on compound rather than simple interest.
Note: Results are estimates for educational purposes and assume a constant interest rate. Actual returns from market-linked investments will vary, and interest from FDs and recurring deposits is taxable. Always verify rates and tax treatment before investing.
Frequently Asked Questions — Compound Interest Calculator
Compound interest is interest earned on both your original principal and on the interest already added to it. Unlike simple interest, which is calculated only on the principal, compound interest causes your money to grow at an accelerating pace because each interest payment starts earning its own interest. This snowball effect is why compounding is often called the "eighth wonder of the world".
The formula is A = P × (1 + r/n)^(n×t), where A is the maturity amount, P is the principal, r is the annual interest rate (as a decimal), n is the number of times interest compounds per year, and t is the time in years. Total interest earned = A − P. When you also add regular monthly contributions, each deposit compounds for the remaining months, so this calculator iterates month-by-month for accuracy.
The more frequently interest is compounded, the more you earn, because interest starts earning interest sooner. For example, ₹1,00,000 at 10% for 10 years grows to ₹2,59,374 with annual compounding, but to ₹2,70,704 with monthly compounding — a difference of over ₹11,000 purely from frequency. Most Indian bank FDs compound quarterly, while many savings and recurring schemes compound monthly.
Simple interest is calculated only on the principal, so it grows your money in a straight line. Compound interest is calculated on the principal plus accumulated interest, so it grows exponentially. Over short periods the difference is small, but over 15–20 years compound interest can produce two to three times more wealth than simple interest at the same rate.
Yes. Enter an optional monthly contribution and the calculator adds that amount every month, compounding each deposit for the remaining tenure. This models recurring deposits, SIP-style savings, or simply topping up your investment regularly — and shows how disciplined monthly investing dramatically boosts your final corpus.
It depends on the instrument. Interest from bank FDs and recurring deposits is fully taxable as per your income slab, and banks deduct TDS if interest exceeds ₹40,000 per year (₹50,000 for senior citizens). PPF and Sukanya Samriddhi interest is fully tax-free (EEE status). Always factor in post-tax returns when comparing options.