Tools
Compound Interest Calculator
Maturity value at any compounding frequency, next to what simple interest would have paid.
Inputs
Maturity value
₹1,61,051
Compound interest
₹61,051
Simple interest would be
₹50,000
Compounding yearly earns ₹11,051 more than simple interest over 5 years. Simple-interest maturity: ₹1,50,000.
View year-by-year balance
| Year | Interest in year | Balance |
|---|---|---|
| 1 | ₹10,000 | ₹1,10,000 |
| 2 | ₹11,000 | ₹1,21,000 |
| 3 | ₹12,100 | ₹1,33,100 |
| 4 | ₹13,310 | ₹1,46,410 |
| 5 | ₹14,641 | ₹1,61,051 |
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or message us on WhatsApp instead →Frequently asked
What is the formula?+
A = P × (1 + r ÷ n)^(n × t): principal P, annual rate r, n compounding periods a year and t years. Interest is A minus P. Simple interest for comparison is P × r × t, with no interest on interest.
How much does compounding frequency matter?+
Less than people expect. ₹1,00,000 at 10% for a year gives ₹1,10,000 compounded yearly, ₹1,10,381 quarterly and ₹1,10,516 daily. The rate and the number of years move the result far more than the frequency does.
Which frequency do Indian products use?+
Bank fixed and recurring deposits compound quarterly. PPF, EPF and small savings schemes credit interest yearly. Loan interest is generally charged monthly on the reducing balance. Mutual fund returns are quoted as yearly CAGR.
What is the effective annual rate?+
The yearly rate that would give the same result as the stated rate compounded more often. 10% compounded quarterly is an effective 10.38%. Banks call this the annualised yield and are required to disclose it alongside the nominal rate.
Is interest earned this way taxable?+
Interest from deposits and bonds is taxed at your slab rate in the year it accrues, whether or not it is paid out. PPF interest is the main exception, being fully exempt. Use the FD calculator for a bank deposit with the TDS notes.
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