Compound Interest Calculator
Calculate compound interest with monthly, quarterly or yearly compounding. Free calculator.
In short
A compound interest calculator finds how much an amount grows when interest is added to the principal at regular intervals and itself earns interest. VyaparKit's free compound interest calculator takes the principal, annual rate, number of years and a compounding frequency of monthly, quarterly, half-yearly or yearly, and shows the maturity amount and the interest earned.
Maturity amount
₹1,63,861.64
Interest earned ₹63,861.64
Formula
A = P × (1 + r/n)^(n×t), where n is compounding periods per year.
Bank FDs compound how often?
Most Indian banks compound FDs quarterly.
About the compound interest calculator tool
Compound interest is interest on interest. Bank fixed deposits in India compound quarterly, recurring deposits and most savings products compound quarterly or monthly, PPF compounds yearly, and loans from NBFCs and credit cards compound monthly. The same 8% rate produces different results depending on how often it compounds, and over five or ten years the difference against simple interest is large. Understanding it helps you compare an FD against a business investment or a supplier's credit terms.
By-hand attempts usually stop at yearly compounding because raising 1.02 to the power 20 is tedious, and people compare an FD quoted at 7.1% quarterly with a bond quoted at 7.3% yearly without adjusting. The compound interest calculator applies A = P × (1 + r ÷ n)^(n × t) for the chosen frequency and shows the maturity value and interest so you can compare offers on the same basis.
Pair it with the EMI calculator to compare the cost of a loan against the return on an investment, and with the break-even calculator when deciding whether to fund an expansion from savings or borrowing.
How to calculate compound interest for any compounding frequency
- 1
Enter the principal
In 'Principal' type the amount invested or borrowed, for example 1,00,000.
- 2
Enter the annual rate
In 'Rate (p.a.)' type the yearly percentage, such as 8 or 7.25.
- 3
Enter the period in years
In 'Years' type the duration. Half years are accepted, for example 2.5.
- 4
Choose the compounding
Select 'Monthly', 'Quarterly', 'Half-yearly' or 'Yearly'. Bank FDs are usually quarterly; PPF is yearly; NBFC loans are often monthly.
- 5
Read the maturity amount
The large figure is the maturity value, with interest earned below it and the principal and compounding frequency listed in the breakdown.
The formula, with a worked example
- A = P × (1 + r ÷ n)^(n × t), where P is principal, r the annual rate as a decimal, n the compounding periods per year and t the years. Interest = A − P.
- Worked example, yearly: ₹1,00,000 at 8% for 5 years. A = 1,00,000 × 1.08^5 = ₹1,46,933; interest ₹46,933.
- Same amount, quarterly (n = 4): A = 1,00,000 × (1 + 0.02)^20 = ₹1,48,595; interest ₹48,595. Quarterly compounding adds about ₹1,662 over yearly.
- Same amount, monthly (n = 12): A = 1,00,000 × (1 + 0.006667)^60 = ₹1,48,985; interest ₹48,985.
- Compare with simple interest: ₹1,00,000 × 8 × 5 ÷ 100 = ₹40,000. Compounding quarterly earns ₹8,595 more over five years.
- Half-yearly example: ₹2,00,000 at 7% for 3 years, n = 2. A = 2,00,000 × 1.035^6 = ₹2,45,851; interest ₹45,851.
- Rule of 72: money doubles in roughly 72 ÷ rate years. At 8% that is about 9 years; at 12% about 6 years.
- Interest on fixed deposits is taxable as income; banks deduct TDS above the annual threshold. The calculator shows gross interest before tax.
Who uses the compound interest calculator
Business owners parking surplus cash
A trader in Rajkot compares a 7.25% quarterly FD for 2 years against paying down a 12% monthly-compounding overdraft.
Families planning savings
A parent in Jaipur estimates what a ₹5 lakh deposit at 7% compounded quarterly becomes in 10 years for college fees.
Borrowers from NBFCs
A small business owner checks what a ₹3 lakh loan at 18% compounded monthly grows to if left unpaid for a year.
CA firms advising on investments
An adviser shows a client the difference between quarterly and yearly compounding on the same headline rate before choosing between an FD and a bond.
Compound Interest Calculator: frequently asked questions
- What is the formula for compound interest?
- Maturity amount A = P × (1 + r ÷ n)^(n × t), where P is the principal, r the annual rate as a decimal, n the number of compounding periods per year and t the number of years. Compound interest is A − P. For ₹1,00,000 at 8% for 5 years compounded quarterly, A is ₹1,48,595 and the interest is ₹48,595.
- How often do Indian banks compound interest on fixed deposits?
- Most banks compound FD interest quarterly, as RBI guidelines allow, and pay it at maturity or credit it periodically. Savings account interest is calculated daily and credited quarterly. PPF compounds yearly. Loans and credit cards from banks and NBFCs typically compound monthly, which is why unpaid balances grow quickly.
- Does monthly compounding earn much more than yearly?
- A little, and the gap grows with rate and time. ₹1,00,000 at 8% for 5 years becomes ₹1,46,933 with yearly compounding, ₹1,48,595 quarterly and ₹1,48,985 monthly. The difference between monthly and yearly is about ₹2,052 over five years, roughly 0.4% extra per year of effective return.
- What is the effective annual rate?
- The yearly rate that would give the same result as the quoted rate with its compounding. For 8% compounded quarterly, (1 + 0.02)^4 − 1 = 8.24%. Use it to compare products with different compounding: a 7.2% FD compounded quarterly (7.40% effective) beats a 7.3% bond paying yearly.
- How long does it take to double money with compound interest?
- Divide 72 by the annual rate for a quick estimate. At 6% it takes about 12 years, at 8% about 9 years and at 12% about 6 years. The exact figure at 8% compounded yearly is 9.01 years; quarterly compounding shortens it slightly to about 8.75 years.
- Is compound interest on FD taxable?
- Yes. Interest on fixed deposits is added to your income and taxed at your slab rate, on an accrual basis each year even if it is paid only at maturity. Banks deduct TDS when interest crosses the annual threshold (₹50,000 for most individuals and ₹1,00,000 for senior citizens from FY 2025-26). Check current thresholds with your CA.