📈 Compound Interest Calculator

Calculate the future value of your investments with compound interest

Investment Details

Future Value

₹0
Maturity Amount

Principal Amount

₹0

Interest Earned

₹0

Principal Interest

Understanding Compound Interest

Compound interest is calculated on the principal amount and accumulated interest from previous periods. Albert Einstein famously called it "the eighth wonder of the world." The power of compounding means your money grows exponentially over time—you earn returns on your returns.

How to Use This Calculator:

  1. Enter your principal amount (initial investment)
  2. Input the expected annual interest rate
  3. Select the time period in years
  4. Choose compounding frequency (more frequent = higher returns)
  5. View your maturity value, principal, and interest earned
  6. See visual breakdown of investment growth

The Formula:

A = P(1 + r/n)^(nt)
Where: A = Final amount, P = Principal, r = Annual rate (decimal), n = Compounding frequency per year, t = Time in years

Investment Options Using Compound Interest:

  • Fixed Deposits (FDs): 6-7% p.a., quarterly compounding, guaranteed returns
  • Recurring Deposits (RDs): 6-7% p.a., quarterly compounding, monthly investment
  • Public Provident Fund (PPF): 7.1% p.a., annual compounding, tax-free
  • National Savings Certificate (NSC): 7.7% p.a., annual compounding, 80C benefit
  • Corporate Deposits: 7-9% p.a., quarterly compounding, higher risk
  • Debt Mutual Funds: 7-9% p.a., daily compounding, tax-efficient after 3 years
  • Senior Citizen Savings (SCSS): 8.2% p.a., quarterly payout, for 60+ age

Compounding Strategy Tips:

  • Start Early: ₹1 lakh at 8% for 30 years = ₹10 lakhs (vs 10 years = ₹2.16 lakhs)
  • Frequency Matters: Daily compounding beats annual by 0.2-0.5% effective return
  • Don't Withdraw: Let interest accumulate—breaking compounds resets growth
  • Reinvest Dividends: In mutual funds, choose growth option over dividend
  • Tax Implications: Interest is taxable as per slab (PPF/EPF exceptions)
  • Laddering Strategy: Split across FDs with different maturities for liquidity
  • Compare Effective Rates: 7% quarterly (7.19% effective) vs 7.1% annual
  • Long-term Focus: Compounding works best over 10+ years
  • Rule of 72: Years to double = 72 ÷ interest rate (e.g., 8% = 9 years)