Compound Interest Calculator
See how your investments grow over time with SIP contributions and year-by-year chart — free & instant
Future value
Total invested
Interest earned
What is this Compound Interest Calculator?
This free compound interest calculator shows you exactly how your money grows over time through the power of compounding — combining your initial lump-sum investment with regular monthly SIP contributions, across 5 compounding frequencies (daily, monthly, quarterly, semi-annually, annually). The result is a full corpus breakdown showing total invested amount, total interest earned, and a year-by-year interactive bar chart that visualises the growing gap between what you put in and what compounding generates on top.
Whether you are planning a Fixed Deposit renewal, calculating a SIP corpus target for retirement, projecting PPF maturity, or simply comparing two investment options at different interest rates — this calculator gives you the precise numbers instantly. Change any input and the results update in real time; hover over any bar in the chart to see the exact value, total invested, and interest earned at that year.
How to use this calculator — step by step
- Step 1 — Currency: Select ₹ for Indian investments, $ for US, or any of the 7 supported currencies. This only changes the display symbol — the math is currency-agnostic.
- Step 2 — Initial investment: The lump sum you invest today. For FD/RD: the deposit amount. For a SIP-only plan with no lump sum: enter 0. For PPF: enter any existing balance or 0 if starting fresh.
- Step 3 — Monthly contribution (SIP): The amount you add every month. For FD with no top-ups: enter 0. For a pure SIP: enter your monthly amount. For PPF: enter your yearly contribution ÷ 12 (e.g. ₹1,50,000/year = ₹12,500/month).
- Step 4 — Annual interest rate: The expected annual return percentage. Use: 6.5–7.5% for FDs, 7.1% for PPF, 8–9% for NPS, 10–12% for equity mutual funds (SIP), 7–8% for debt funds.
- Step 5 — Investment period: Number of years. FDs: 1–10 years. PPF: minimum 15 years. SIP for retirement: 20–35 years. For long periods, the chart shows only the last 20 years of bars to keep it readable — all numbers are still calculated for the full period.
- Step 6 — Compounding frequency: How often interest is calculated and added to the principal. Select Monthly for SIP/mutual funds, Quarterly for most FDs (RBI mandates quarterly for bank FDs), Annually for PPF and NSC, Daily for savings accounts.
- Step 7 — Read the results: Three cards show Future Value (total corpus at end), Total Invested (your actual contributions), and Interest Earned (what compounding added). The bar chart shows year-by-year growth — teal bars are total value, green bars are your contributions. The gap between them is pure compounding returns.
Key features
- Lump sum + SIP combined: Model any real investment — a starting amount plus regular top-ups simultaneously
- 5 compounding frequencies: Daily (365×/year), Monthly (12×), Quarterly (4×), Semi-annually (2×), Annually (1×)
- Interactive bar chart: Hover/tap any year bar to see exact total value, amount invested, and interest earned that year
- Real-time calculation: Results update as you type — instantly compare rates, durations, and contribution amounts
- 7 currency symbols: ₹, $, €, £, ¥, A$, C$
The power of compounding — why time is your greatest investment asset
Albert Einstein reportedly called compound interest the "eighth wonder of the world." Whether or not he said it, the math is undeniable: money earning interest on interest grows exponentially, not linearly. This is the most important financial concept for building long-term wealth — and most people either discover it too late or never grasp the full magnitude of its effect.
Compound interest vs simple interest — the real difference
With simple interest, you earn interest only on your original principal every year. ₹1 lakh at 8% simple interest for 10 years = ₹1,00,000 + (₹8,000 × 10) = ₹1,80,000.
With compound interest (annual compounding), Year 1 interest = ₹8,000. Year 2 interest = 8% of ₹1,08,000 = ₹8,640. Year 3 = 8% of ₹1,16,640 = ₹9,331. And so on. Final value after 10 years = ₹2,15,892 — that is ₹35,892 more than simple interest, earned without any additional contribution. Over 20 years, the difference becomes ₹3,66,096 vs ₹2,60,000 — compound interest produces 41% more. Over 30 years: ₹10,06,266 vs ₹3,40,000 — compound interest produces nearly 3× more. This acceleration in later years is the "hockey stick" effect — and the bar chart in this calculator shows it visually.
Why most investors underestimate compounding
Starting late costs more than you think
Two investors both invest ₹5,000/month at 12%. Investor A starts at 25 and stops at 35 (10 years, ₹6L invested). Investor B starts at 35 and invests until 60 (25 years, ₹15L invested). At 60: Investor A has ~₹1.76 crore. Investor B has ~₹94 lakh. A invested 40% less money and still ends up richer by ₹82 lakh — purely because of time.
Rate differences are massive over decades
₹10,000/month SIP for 25 years: at 10% = ₹1.33 crore. At 12% = ₹1.89 crore. At 14% = ₹2.71 crore. A 4% rate difference (10% vs 14%) produces 2× more corpus on the same contributions over the same period. This is why choosing between a 7% FD and a 12% equity SIP matters enormously over 20+ years.
Small SIP increases compound dramatically
Increasing your SIP by just ₹1,000/month — from ₹10,000 to ₹11,000 — at 12% for 20 years adds ₹9.99 lakh to your final corpus. That ₹1,000 extra per month (₹2.4L total extra over 20 years) generates ₹9.99L — a 4× multiplier. Use this calculator: change the monthly contribution field and watch the future value update instantly.
Compound interest for Indian investment products — complete guide
Systematic Investment Plan (SIP) — Mutual Funds: SIP is the most popular investment route for Indian retail investors. A SIP invests a fixed amount monthly in a mutual fund scheme. Returns compound through NAV growth — equity funds have historically returned 10–15% annually over 10+ year periods (not guaranteed). For SIP calculation: enter ₹0 as initial investment, your monthly SIP amount as Monthly Contribution, expected return (10–12% for equity, 6–8% for debt), duration in years, and select Monthly compounding. The result shows your estimated corpus — remember this is based on a fixed assumed rate, not the actual volatile market returns.
Fixed Deposit (FD): Bank FDs compound interest quarterly (mandated by RBI for most savings instruments). Enter FD amount as Initial Investment, ₹0 as Monthly Contribution, the FD interest rate, tenure in years, and select Quarterly compounding. Current FD rates (2025): SBI 6.8% (1–2 years), HDFC Bank 7.0% (1–5 years), small finance banks up to 9%. Senior citizens typically get 0.25–0.50% extra. Tax note: FD interest is fully taxable as income — if you are in the 30% bracket, a 7% FD effectively yields only ~4.9% post-tax. Factor this when comparing FD vs ELSS SIP.
Recurring Deposit (RD): An RD is essentially a fixed monthly contribution FD. Enter ₹0 as Initial Investment, your monthly RD amount as Monthly Contribution, the RD interest rate, tenure, and select Quarterly compounding. RD rates are typically 0.25–0.50% lower than FD rates. SBI RD: 6.5%, HDFC RD: 6.75%. Tax treatment same as FD — interest is taxable.
Public Provident Fund (PPF): PPF offers annual compounding at a government-declared rate (currently 7.1% for Q1 FY 2025-26, unchanged since April 2020). Enter any existing balance as Initial Investment, yearly contribution ÷ 12 as Monthly Contribution (maximum ₹1.5L/year = ₹12,500/month), 7.1% as rate, remaining years as duration, and select Annual compounding. PPF has a 15-year lock-in (extendable in 5-year blocks). Key advantage: PPF follows EEE tax treatment — contributions are 80C deductible, interest is tax-free, maturity is tax-free. At 7.1% tax-free, PPF is often better than a 9–10% taxable FD for investors in the 20–30% tax bracket.
National Pension System (NPS): NPS is a long-term retirement-focused investment. Two tiers: Tier I (pension account, lock-in till 60) and Tier II (voluntary savings, no lock-in). NPS invests in equity (E), corporate bonds (C), and government securities (G). Historical returns: Tier I Equity ~11–13% over 10 years; Tier I G-Secs ~8–9%. For NPS projection: use a blended rate (e.g. 10% for aggressive allocation) with Monthly compounding. Tax benefit: Additional ₹50,000 deduction under Section 80CCD(1B) over and above ₹1.5L 80C limit — unique to NPS.
Equity Linked Savings Scheme (ELSS): ELSS mutual funds are 80C tax-saving investments with a 3-year lock-in (shortest among 80C options). Historical returns: 12–15% over 10+ years (not guaranteed). For ELSS SIP projection: enter monthly SIP, 12% expected rate, investment duration, Monthly compounding. Unlike PPF, ELSS gains above ₹1L/year are taxed at 10% LTCG — factor this for realistic post-tax projections.
A complete worked example — building a ₹1 crore corpus
Goal: ₹1 crore in 20 years. You have ₹2 lakh to invest today plus can invest monthly. At 12% annual return (monthly compounding):
- The ₹2 lakh lump sum alone grows to: ₹2L × (1 + 0.01)^240 = ₹2L × 10.89 = ₹21.79 lakh after 20 years
- Remaining needed from SIP: ₹1 crore − ₹21.79 lakh = ₹78.21 lakh
- Monthly SIP needed for ₹78.21 lakh at 12% for 20 years: approximately ₹7,900/month
- Total invested: ₹2L + (₹7,900 × 240) = ₹2L + ₹18.96L = ₹20.96 lakh
- Total corpus: ₹1 crore — of which ₹20.96 lakh is your money and ₹79.04 lakh is pure compounding returns
Verify this in the calculator: enter ₹2,00,000 as Initial Investment, ₹7,900 as Monthly Contribution, 12% rate, 20 years, Monthly compounding. The result will be approximately ₹1 crore. The bar chart shows how the teal bars (total value) pull far above the green bars (contributions) in the final 5–7 years — this is the hockey stick effect.
The effect of compounding frequency — does it matter?
For ₹5 lakh at 8% for 10 years, here is how corpus varies by compounding frequency:
- Annual compounding: ₹10,79,462 (Effective rate = 8.000%)
- Semi-annual compounding: ₹10,95,562 (Effective rate = 8.160%)
- Quarterly compounding: ₹10,98,612 (Effective rate = 8.243%)
- Monthly compounding: ₹11,01,571 (Effective rate = 8.300%)
- Daily compounding: ₹11,02,706 (Effective rate = 8.328%)
The difference between annual and daily compounding on ₹5L over 10 years is only ₹23,244 — less than 0.5%. The interest rate and investment duration are far more important than compounding frequency. A 1% higher rate (8% vs 9%) over 10 years generates ₹68,895 more on the same ₹5L — nearly 3× the benefit of switching from annual to daily compounding.
Free, instant, no signup — see your full corpus with year-by-year chart.
Frequently asked questions
How does compound interest work and why is it powerful?
Compound interest earns interest on both your original principal and all the interest already accumulated. This creates a self-reinforcing cycle: in Year 1, you earn interest on ₹1 lakh. In Year 2, you earn interest on ₹1 lakh + Year 1's interest. In Year 3, on ₹1 lakh + both previous years' interest. The formula is: A = P × (1 + r/n)^(n×t), where P = principal, r = annual rate (decimal), n = compounding frequency per year, t = years. Example: ₹1 lakh at 8% monthly compounding for 10 years = ₹1,00,000 × (1 + 0.08/12)^120 = ₹1,00,000 × 2.2196 = ₹2,21,964. Compare to simple interest: ₹1,00,000 + (₹8,000 × 10) = ₹1,80,000. The extra ₹41,964 is entirely generated by interest-on-interest — you did nothing additional to earn it. Over 30 years, this same calculation gives ₹10,06,266 — ten times your original investment.
How do I calculate SIP returns with this calculator?
Enter ₹0 as Initial Investment (if no lump sum), your monthly SIP amount as Monthly Contribution, the expected annual return rate, duration in years, and select Monthly compounding. For example: ₹10,000/month SIP at 12% for 20 years → enter 0, 10000, 12, 20, Monthly. Result: Future Value ≈ ₹99.91 lakh, Total Invested = ₹24 lakh, Interest Earned ≈ ₹75.91 lakh. That means compounding generates ₹3.16 for every ₹1 you invest over 20 years. Important: SIP mutual fund returns are market-linked and NOT guaranteed. The calculator uses a fixed assumed rate — actual returns will vary year to year with market performance. Use 10% for conservative equity estimates, 12% for moderate, 14% only for aggressive/long-horizon scenarios. For debt SIP or balanced funds, use 7–9%.
Which compounding frequency should I choose for FD, PPF, SIP and NPS?
Fixed Deposit: Select Quarterly — RBI mandates quarterly compounding for bank FDs. Recurring Deposit: Select Quarterly — same as FD. PPF (Public Provident Fund): Select Annually — PPF computes and credits interest annually on March 31. NSC (National Savings Certificate): Select Annually — interest is compounded annually but paid at maturity. Mutual Fund SIP: Select Monthly — SIP NAV growth compounds continuously, Monthly is the closest practical approximation. NPS: Select Monthly or Annually — NPS returns are market-linked; either is acceptable for projection. Savings account: Select Daily — most banks compute savings account interest daily (though credited quarterly). SSY (Sukanya Samriddhi Yojana): Select Annually — compounded annually at current 8.2% rate.
How do I use this calculator for FD planning?
Enter the FD amount as Initial Investment (e.g. ₹5,00,000), enter ₹0 as Monthly Contribution (standard FDs have no top-ups), enter the FD interest rate (e.g. 7.0%), enter the FD tenure in years (e.g. 5), and select Quarterly compounding. Result: Future Value = ₹7,05,373 — a gain of ₹2,05,373 over 5 years. For senior citizen FDs (typically 0.5% extra): change rate to 7.5% and see the difference — ₹7,20,944 vs ₹7,05,373 — senior citizen benefit adds ₹15,571 over 5 years. For tax FD (5-year lock-in, 80C benefit): same calculation, but remember the maturity amount is taxable — actual post-tax return at 30% bracket on ₹2,05,373 interest = ₹2,05,373 − ₹61,612 TDS = net ₹1,43,761 gain vs ₹5L investment — effective post-tax yield ≈ 4.97%.
How do I use this calculator for PPF planning?
PPF has a 15-year lock-in with an annual contribution limit of ₹1.5 lakh (minimum ₹500). Enter: Initial Investment = any existing PPF balance (or 0 for new account), Monthly Contribution = ₹12,500 (= ₹1.5L ÷ 12 for maximum contribution), Annual Interest Rate = 7.1% (current rate, subject to quarterly review by government), Investment Period = 15 (or remaining years), Compounding Frequency = Annually. Result for 15-year maximum contribution from scratch: Total Invested = ₹22.5L, Future Value ≈ ₹40.68 lakh, Interest = ₹18.18 lakh — all tax-free. PPF's EEE status (exempt-exempt-exempt) makes it extremely valuable for investors in the 20–30% tax bracket. The tax-free ₹18.18 lakh is equivalent to earning ₹26 lakh in a taxable FD (at 30% tax bracket). If you extend PPF in 5-year blocks after 15 years, the compounding accelerates further — at Year 20, corpus would be approximately ₹58.3 lakh; at Year 25, approximately ₹82.6 lakh.
Does this calculator account for inflation?
No — this calculator shows nominal returns (the raw number before inflation adjustment). To estimate real (inflation-adjusted) returns, subtract the expected inflation rate from the interest rate before entering it. India's average CPI inflation has been approximately 5–6% per year over the past decade. So: FD at 7% with 6% inflation = enter 1% (7% − 6%) to see your inflation-adjusted growth. SIP at 12% with 6% inflation = enter 6% (12% − 6%) to see real wealth creation. Example: ₹10,000/month SIP at 12% nominal for 20 years → corpus ₹99.91 lakh. Same SIP at 6% real return for 20 years → corpus ₹46.2 lakh. The ₹46.2 lakh is the actual purchasing power of your corpus in today's money — the ₹99.91 lakh is the nominal value, but with 6% inflation, it buys only what ₹46.2 lakh buys today. This is why financial advisors recommend equity (12–15% nominal, 6–9% real) over FDs (7% nominal, 1–2% real) for long-term wealth building.
Are these returns accurate for real investments?
This calculator gives mathematically accurate results for the inputs you provide — if the rate, duration, and compounding frequency are exactly as entered, the output is correct. What it cannot predict is future real-world returns for market-linked investments. Mutual funds and equities are volatile — a 12% assumed rate in the calculator may actually be 6% in a bad year and 22% in a good year, averaging 12% over time. For FDs and PPF at fixed rates, the calculator is highly accurate (minor variance only from exact contribution timing). Key caveats: (1) Tax: FD/RD interest is taxable; ELSS/equity gains above ₹1L are taxed at 10% LTCG. Post-tax returns will be lower than shown. (2) Inflation: See the FAQ above for real return calculation. (3) Fees: Mutual fund expense ratios (0.5–1.5%) reduce the effective return — use 10.5% instead of 12% to factor in a 1.5% expense ratio. (4) Contribution timing: The calculator assumes contributions at the start of each month; actual SIP dates and market entry points will cause minor variance. For all major financial decisions — retirement planning, home purchase timing, education corpus — consult a SEBI-registered investment advisor.