Calculate how your investment grows with compound interest. Get future value, total interest earned, and see the impact of regular contributions — free and instant.
₹
₹1,000₹1,00,00,000
%
130
yrs
140
₹
₹0₹5,00,000
Future Value
₹0
Total Interest Earned
₹0
Total Amount Invested
₹0
Growth Breakdown
Invested amount vs interest earned
Total Invested
₹0
Interest Earned
₹0
Future Value
₹0
What is a Compound Interest?
A compound interest calculator helps you estimate how much your investment or savings will grow when interest is earned not just on your original amount, but on all previously accumulated interest as well. This snowball effect — earning interest on interest — is what makes compound interest fundamentally more powerful than simple interest and the mathematical engine behind almost every long-term wealth creation strategy.
In India, compound interest is the basis for fixed deposits, recurring deposits, PPF, NSC, and the returns on most debt mutual funds. Even equity mutual funds, while not technically "interest-bearing", deliver returns that follow a compounded growth curve — which is why CAGR (Compound Annual Growth Rate) is the standard way to measure them. Understanding compound interest is therefore essential for any Indian investor, whether you are parking money in a bank FD, evaluating a small finance bank's savings rate, or planning for retirement through a long-horizon investment.
The key variables that determine your final corpus are: the principal amount (how much you start with), the annual interest rate (what percentage you earn), the time period (how long you stay invested), the compounding frequency (how often interest is added to your principal), and any regular contributions you make along the way. This calculator lets you adjust all five in real time, giving you an immediate visual sense of how each variable affects your wealth.
What makes this tool especially useful is the ability to model mixed investment scenarios — a lump sum with regular top-ups. For example, you may invest ₹2,00,000 from a bonus today and add ₹5,000 monthly from your salary. The calculator handles both streams simultaneously and shows you a single, accurate future value. For a pure monthly SIP in mutual funds without an initial lump sum, see our SIP Calculator.
How to use this Compound Interest calculator
Enter your Principal Amount — the lump sum you are investing or depositing today. For a bank FD, this is the deposit amount. For a savings goal, this might be a bonus or inheritance you are putting to work. The slider covers ₹1,000 to ₹1,00,00,000.
Set the Annual Interest Rate — enter the rate offered by your bank, bond, or instrument in percentage per annum. For FDs, use the exact rate on the bank's website. For projections, common benchmarks are 7% for conservative (FD/PPF range) and 10–12% for long-term equity-linked returns.
Choose your Time Period — how many years you plan to stay invested. For short-term goals (1–3 years), even a percentage point difference in rate matters. For long-term goals (10+ years), time itself becomes the dominant factor.
Select the Compounding Frequency — most Indian bank FDs compound quarterly; savings accounts typically compound annually or semi-annually; some corporate bonds compound half-yearly. Monthly compounding gives the highest returns and is used as the default for projections.
Add a Regular Contribution (optional) — if you plan to top up your investment periodically, enter the amount here. This models an FD with regular top-ups, a recurring deposit alongside a fixed deposit, or a bond with additional purchases.
Choose Contribution Frequency — set this to match how often you will make the additional contributions (monthly, quarterly, or yearly).
Read the results — your Future Value is the target corpus, Total Interest Earned shows the power of compounding, and Total Amount Invested confirms how much is your own money. Use the step breakdown to see exactly how the calculation was performed.
Formula & Methodology
For lump sum principal:
A = P × (1 + r/n)^(n×t)
For each regular contribution (added at intervals):
FV_k = C × (1 + r/n)^(n × t_remaining)
where t_remaining is the time left from the k-th contribution to the end of the investment period.
Total Future Value:
A_total = A_principal + Σ FV_k
Variable definitions:
- A — Future value (maturity amount)
- P — Principal amount (initial investment, ₹)
- r — Annual interest rate as a decimal (e.g. 8% = 0.08)
- n — Compounding frequency per year (1 = yearly, 2 = half-yearly, 4 = quarterly, 12 = monthly)
- t — Time period in years
- C — Regular contribution amount (₹)
- k — Index of each contribution (1st, 2nd, 3rd… payment)
- t_remaining — Years remaining after the k-th contribution
Worked example:
Principal: ₹5,00,000 | Rate: 8% p.a. | Time: 10 years | Compounding: Quarterly | Regular Contribution: ₹5,000/month
Step 1 — Rate per quarter: 8% ÷ 4 = 2% per quarter
Step 2 — Total quarters: 4 × 10 = 40 quarters
Step 3 — Future value of principal: ₹5,00,000 × (1.02)^40 = ₹5,00,000 × 2.2080 = ₹11,04,016
Step 4 — Future value of 120 monthly contributions of ₹5,000, each compounded for remaining periods
Step 5 — Total invested: ₹5,00,000 + (₹5,000 × 120) = ₹11,00,000
Step 6 — Total future value ≈ ₹19,84,000 | Total interest ≈ ₹8,84,000
Assumptions:
- Interest rate remains constant throughout the tenure (actual FD rates may change at renewal)
- Regular contributions are made at the start of each contribution period
- No penalties or premature withdrawal adjustments are modelled
- Results are rounded to the nearest rupee for display
Frequently Asked Questions
What is compound interest and how does it differ from simple interest?
Compound interest is interest calculated on both the original principal and the accumulated interest from previous periods, causing your money to grow exponentially over time. Simple interest, by contrast, is calculated only on the principal amount, resulting in linear growth. For example, ₹1,00,000 at 8% p.a. simple interest grows to ₹1,40,000 in 5 years, while the same amount at 8% compound interest (yearly) grows to ₹1,46,933. The difference widens dramatically over longer time horizons, which is why compound interest is often called the most powerful force in personal finance.
What is the compound interest formula used by this calculator?
The compound interest formula is A = P × (1 + r/n)^(n×t), where A is the future value, P is the principal, r is the annual interest rate (as a decimal), n is the number of compounding periods per year, and t is the time in years. When regular contributions are added, the future value of each contribution is calculated separately using the remaining compounding periods and summed together. This calculator uses this exact formula and handles all four compounding frequencies — yearly, half-yearly, quarterly, and monthly.
How does compounding frequency affect my returns?
More frequent compounding results in higher returns because interest is calculated and added to your principal more often, giving the newly earned interest more time to earn further interest. For ₹1,00,000 at 8% p.a. over 10 years: yearly compounding gives ₹2,15,892, while monthly compounding gives ₹2,22,040 — a difference of over ₹6,000 on the same principal and rate. In India, most bank fixed deposits compound quarterly, while savings accounts typically compound annually or semi-annually.
How do I use the Compound Interest Calculator?
Enter your Principal Amount (the lump sum you are starting with), set the Annual Interest Rate in percentage, and choose your Time Period in years. Select your Compounding Frequency — monthly gives the highest returns. If you plan to add money regularly, enter a Regular Contribution amount and choose how often you will contribute (monthly, quarterly, or yearly). The calculator instantly shows your Future Value, Total Interest Earned, and Total Amount Invested.
What is the difference between the Compound Interest Calculator and the SIP Calculator?
The Compound Interest Calculator is designed for lump sum investments with optional regular top-ups, making it ideal for fixed deposits, savings accounts, bonds, and one-time investments. The SIP Calculator is specifically designed for monthly systematic investment plans in mutual funds, where the primary input is a fixed monthly investment with no initial lump sum. If you have both a lump sum and want to add monthly amounts, the Compound Interest Calculator handles the combined scenario. For pure SIP planning in equity mutual funds, use our [SIP Calculator](/sip-calculator/).
Is the interest earned on fixed deposits taxable in India?
Yes, interest earned on fixed deposits and savings accounts is fully taxable in India as 'Income from Other Sources' and added to your total income for the financial year. TDS is deducted at 10% if the interest exceeds ₹40,000 per year (₹50,000 for senior citizens) from a single bank. If your total income is below the taxable limit, you can submit Form 15G (or 15H for senior citizens) to avoid TDS deduction. To calculate exactly how much TDS applies to your FD interest, use our [TDS Calculator](/tds-calculator/).
What is a good compound interest rate in India?
In India, typical compound interest rates range from 3–4% p.a. on savings accounts, 6–7.5% p.a. on bank fixed deposits, 7–8.1% p.a. on small finance bank FDs, and 7.1% on PPF (government-backed). Equity mutual funds have historically delivered 10–14% CAGR over long periods, though these are market-linked and not guaranteed. For inflation-beating growth, financial planners generally recommend targeting returns above 7–8% p.a. — which typically means including some equity exposure in your portfolio alongside fixed-income instruments.
How does the Rule of 72 relate to compound interest?
The Rule of 72 is a quick mental shortcut for estimating how long it takes for money to double at a given compound interest rate — simply divide 72 by the annual interest rate. At 8% p.a., your investment doubles in approximately 72 ÷ 8 = 9 years. At 12% p.a., it doubles in just 6 years. This rule works because of the mathematics of exponential growth and is accurate for rates between 6% and 15%. You can verify this instantly by entering your principal and rate into this compound interest calculator and setting the time period to the estimated doubling time.
Can I use this calculator for PPF, NSC, or RD calculations?
You can use this calculator as a close approximation for PPF and NSC since they use compound interest formulas. PPF compounds annually at 7.1% p.a. (current rate) — enter that rate with yearly compounding and you will get an accurate estimate. For recurring deposits (RD), where you make fixed monthly contributions, this calculator's Regular Contribution feature gives a good approximation, though banks use a slightly different RD formula. NSC compounded annually for 5 years at the current rate can also be calculated directly using this tool.
What is the impact of starting early on compound interest growth?
Starting early is the single most powerful lever in compound interest because time is an exponent in the formula. An investor who puts ₹5,00,000 at age 25 at 10% p.a. (compounded annually) will have ₹87,24,706 by age 60 — a 35-year horizon. If they wait until age 35, the same amount grows to only ₹33,63,749 by age 60 — less than half. Those 10 years of delay cost over ₹53 lakh. This phenomenon, where early years create disproportionate wealth, is why financial advisors universally recommend starting investments as early as possible.
How does the Compound Interest Calculator handle regular contributions?
When you enter a Regular Contribution amount and choose its frequency (monthly, quarterly, or yearly), the calculator computes the future value of each individual contribution separately — treating each payment as its own lump sum that compounds for the remaining investment period. All these individual future values are then added to the compounded principal to give the total Future Value. The Total Amount Invested output shows exactly how much you personally put in (principal plus all contributions), so you can see clearly how much of the final corpus is your money versus earned interest.
How is compound interest different from CAGR?
Compound interest describes the mechanism by which interest accrues on an investment at a fixed rate, while CAGR (Compound Annual Growth Rate) is a backward-looking metric used to describe the equivalent annual return of an investment that grew from one value to another over a period. If you invest ₹1,00,000 and it becomes ₹1,46,933 in 5 years, the CAGR is 8% — which is the compound interest rate that produced that growth. CAGR is widely used to evaluate mutual fund and stock performance, and you can verify or reverse-calculate it by matching the future value output of this calculator. To evaluate actual profit or loss from investments, use our [Profit & Loss Calculator](/profit-loss-calculator/).