Compound Interest Calculator
Calculate compound growth with yearly, half-yearly, quarterly or monthly compounding and optional monthly additions.
Maturity amount
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- Principal
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- Total interest
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- Effective annual rate
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Formula
A = P × (1 + r/n)^(n × t)
where n is the number of compounding periods per year. Monthly additions are compounded monthly from the month they are added.
Worked example
₹1,00,000 at 7% a year for 5 years:
| Compounding | Maturity value | Effective annual rate |
|---|---|---|
| Yearly | ₹1,40,255 | 7.000% |
| Half-yearly | ₹1,41,060 | 7.122% |
| Quarterly | ₹1,41,478 | 7.186% |
| Monthly | ₹1,41,763 | 7.229% |
More frequent compounding gives a slightly higher result for the same stated rate. The effective annual rate in the results lets you compare products that quote rates with different compounding frequencies.
Where you meet compounding in India
Bank fixed deposits commonly compound quarterly, while some small savings schemes compound annually. Check the product's terms for the frequency and whether interest is paid out (non-cumulative) or reinvested (cumulative) — this calculator models the cumulative case.
What it does not include
Interest on deposits is taxable at your slab rate and banks may deduct TDS, which lowers the amount that actually compounds. Premature withdrawal penalties are also not modelled.
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is paid only on the principal. Compound interest is also earned on previously earned interest.