Compound Interest Calculator
Estimate maturity for a one-time lumpsum or monthly investments with yearly, half-yearly, quarterly or monthly compounding.
Last updated: 12 July 2026. Rates and product rules are illustrative — verify with your bank or scheme documents.
What is compound interest?
Compound interest is interest calculated on the original principal plus any interest that has already been added. Over multi-year horizons it grows faster than simple interest at the same nominal rate, which is why long-term savings and investments are often modelled with compounding.
The frequency of compounding — yearly, half-yearly, quarterly or monthly — determines how often interest is credited back into the balance before the next period begins.
How this calculator works
Lumpsum: A = P × (1 + r/n)n×t, where P is principal, r is the annual rate as a decimal, n is compounding periods per year, and t is tenure in years.
Monthly investment: Opening principal (if any) plus each monthly deposit grow at the effective monthly rate implied by your chosen compounding frequency — useful for SIP-style savings illustrations.
Worked example: ₹1,00,000 at 8% p.a. for 10 years with yearly compounding → maturity ≈ ₹2,15,892; interest earned ≈ ₹1,15,892. Switch to quarterly or monthly frequency above to see the difference.
Compounding frequency matters
At the same advertised annual rate, monthly compounding credits interest more often than yearly compounding, so maturity is slightly higher. Always match frequency to the product brochure — bank FDs often use quarterly compounding; use our FD calculator for bank-style options including senior rates.
Compound vs simple vs FD
| Feature | Compound interest | Simple interest | Bank FD |
|---|---|---|---|
| How interest grows | Interest earns interest on prior periods | Interest only on original principal | Usually quarterly compound on cumulative FDs |
| Typical use | General savings, SIPs, long-term goals | Short loans, some informal lending | Bank term deposits with locked rate |
| Frequency options | Yearly, half-yearly, quarterly, monthly | Flat accrual over tenure | Bank brochure (often quarterly) |
| Returns guaranteed? | Only if the rate is contractual | Only if the rate is contractual | Contracted rate if held to maturity |
Compare with the simple interest calculator and SIP calculator for flat accrual and mutual fund SIP projections.
Who should use this calculator?
Anyone estimating how a lumpsum or monthly savings habit may grow at an assumed compound rate — education goals, emergency fund targets, or comparing deposit offers before booking.
Frequently asked questions about compound interest
What is compound interest?
Compound interest means you earn interest on both the principal and the interest already accrued. Over long periods this grows faster than simple interest at the same nominal rate.
How is compound interest calculated?
For a lumpsum: A = P × (1 + r/n)^(n×t), where P is principal, r is annual rate as a decimal, n is compounding periods per year, and t is years. Monthly mode adds regular deposits and grows the balance each month at the effective rate implied by your chosen frequency.
What compounding frequency should I choose?
Match the product terms: bank FDs often use quarterly compounding; many savings illustrations use yearly; credit cards and some loans may use monthly. More frequent compounding yields a slightly higher maturity at the same nominal rate.
Lumpsum vs monthly investment — which mode do I use?
Use one-time lumpsum when you invest a single amount today. Use monthly investment when you will add a fixed deposit every month (SIP-style savings). You can also enter an opening principal plus monthly deposits in monthly mode.
Is compound interest the same as FD interest?
The maths is the same family of formulae. Use our FD calculator when you want bank-style options (senior rate bump, tax slab). Use this calculator for generic compound-interest planning with custom frequency and optional monthly contributions.
Does this calculator include tax?
No. Maturity and interest earned are gross figures. Tax on interest depends on the product (e.g. FD TDS under Section 194A) and your income-tax slab.
Why does monthly compounding give a higher amount?
Interest is added to the balance more often, so later periods earn on a larger base. The difference is small over short tenures and more noticeable over long ones.
Can I compare compound and simple interest?
Yes. Enter the same principal, rate and years in this calculator and the simple interest calculator to see how compounding increases maturity over time.
Is the year-wise schedule exact?
It is an illustrative breakdown for planning. Banks may round differently, credit interest on specific dates, or use day-count conventions that change the schedule slightly.
What rate should I assume for planning?
Use the contracted rate for deposits and loans. For market-linked investments, use a conservative expected return for illustration only — past performance does not guarantee future results.
Compound interest calculator India — how much will ₹5 lakh become in 10 years at 8%?
Use lumpsum mode with principal ₹5 lakh, 8% p.a. and 10 years (pick compounding frequency to match your product). Results are mathematical illustrations; bank/MF credited amounts can differ after tax and fees.
Daily vs monthly vs yearly compounding — which should I select for FD planning?
Match the frequency your deposit or product uses (many retail FDs compound quarterly). More frequent compounding slightly raises maturity for the same nominal rate. This is not a bank quote.
Disclaimer: Projections are educational. Actual interest depends on product terms, tax and rounding. Not financial advice.
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