Simple & Compound Interest Calculator
Compare what the same money earns with simple interest and with compound interest — useful for fixed deposits, savings and loans.
| Year | Simple interest balance | Compound balance |
|---|
Interest figures are before tax. Banks may round or compound on different dates, so actual maturity amounts can differ slightly.
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is earned only on the original amount: interest = principal × rate × time. Compound interest is earned on the original amount plus the interest already added, so it grows faster the longer the money stays invested. The table above shows how far apart they drift year by year.
What formula does the compound interest calculator use?
Maturity amount = P × (1 + r ÷ n)^(n × t), where P is the principal, r the yearly rate as a decimal, n the number of times interest is compounded per year and t the time in years. Compound interest is the maturity amount minus the principal.
How often do banks compound a fixed deposit?
Most Indian banks compound fixed deposits quarterly, which is why Quarterly is pre-selected. Savings accounts and some other products compound differently, so check your bank's terms and choose the matching option.
What is the effective yearly rate?
It is the true yearly return once compounding is counted. A 7% rate compounded quarterly works out to about 7.19% a year, which is the figure to use when comparing deposits that compound at different intervals.