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Compound Interest Calculator

Calculate compound interest, final amount, APY, and year-by-year growth.

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How compound interest works

Albert Einstein allegedly called compound interest "the eighth wonder of the world." Whether he said it or not, the math is compelling: at 10% annual interest compounded monthly, ₹1 lakh doubles in roughly 7 years and grows to nearly ₹17 lakhs in 30 years — all without adding a single rupee.

The key insight is that each period's interest becomes part of the principal for the next period. Over decades, this snowball effect becomes dramatic.

Compounding frequency matters

The more frequently interest compounds, the higher your effective yield. Most savings accounts and FDs in India compound quarterly or monthly. PPF compounds annually. US savings accounts often compound daily.

  • Daily — highest effective yield
  • Monthly — common for savings accounts and home loans
  • Quarterly — common for Indian FDs
  • Annually — simplest; PPF, NSC

Using this calculator for FD planning

Enter your deposit amount as principal, the FD interest rate, the term in years, and select "Quarterly" for most Indian banks. The result is your maturity amount. Toggle the year-by-year table to see how your corpus grows over time.

Frequently asked questions

What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest (which is only on the principal), compounding causes your money to grow exponentially over time.
What is the compound interest formula?
A = P × (1 + r/n)^(n×t), where A is the final amount, 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.
What does compounding frequency mean?
Compounding frequency is how often interest is added to your principal. More frequent compounding means slightly more total interest. For example, ₹1,00,000 at 10% for 5 years: annually gives ₹1,61,051; monthly gives ₹1,64,533; daily gives ₹1,64,861.
What is APY vs interest rate?
The stated interest rate (APR) is the annual rate before compounding. APY (Annual Percentage Yield) is the effective rate after accounting for compounding frequency. For 10% compounded monthly, the APY is 10.471%. APY is the true return.
Does this account for regular deposits (SIP)?
No — this calculator is for a lump-sum investment only. For monthly SIP investments with compounding, use the SIP Calculator.

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