Compound Interest Calculator — Calculate CI with Annual, Quarterly & Monthly Compounding
Calculate compound interest instantly for any principal, rate, and tenure. Compare annual, quarterly, monthly, and daily compounding — see the effective annual rate (EAR), year-by-year growth table, and exactly how much more CI earns versus simple interest. Free, no sign-up required.
This compound interest calculator uses the standard formula A = P × (1 + r/n)^(n×t) as described in RBI interest computation guidelines. Effective Annual Rate (EAR) calculations and all reference figures in the SEO tables have been independently verified via script before publication. Simple interest comparison uses the standard SI = P × r × t formula. All calculations run client-side — no data is stored or transmitted. Last editorial review: June 2026.
Compound Interest Calculator — The Math Behind Every Savings and Investment Tool
Albert Einstein allegedly called compound interest the "eighth wonder of the world." Whether he said it or not, the math backs it up. Compound interest is the single most powerful force in personal finance — it is the engine behind Fixed Deposits, PPF, mutual funds, EPF, and every investment product that promises wealth growth over time. This BankZop compound interest calculator lets you see that power in action: enter your principal, rate, tenure, and compounding frequency, and get your exact maturity value, interest breakdown, effective annual rate, and a year-by-year growth table.
Compound Interest Formula
The standard formula for compound interest, used in all financial calculations worldwide:
Example: ₹1 lakh at 10% p.a. for 5 years, quarterly compounding → A = 1,00,000 × (1 + 0.10/4)^(4×5) = ₹1,63,862. CI = ₹63,862. Same principal with simple interest = ₹50,000. Compounding adds ₹13,862 extra.
How Compounding Frequency Changes Your Returns
The same 10% nominal rate produces different returns depending on how often interest is applied:
| Compounding | Frequency | ₹1L @ 10% / 5yr Maturity | Interest Earned | Effective Annual Rate |
|---|---|---|---|---|
| Annually | 1×/year | ₹1,61,051 | ₹61,051 | 10.000% |
| Semi-Annually | 2×/year | ₹1,62,889 | ₹62,889 | 10.250% |
| Quarterly | 4×/year | ₹1,63,862 | ₹63,862 | 10.381% |
| Monthly | 12×/year | ₹1,64,531 | ₹64,531 | 10.471% |
| Daily | 365×/year | ₹1,64,861 | ₹64,861 | 10.516% |
Most Indian bank FDs compound quarterly. Compare EARs — not nominal rates — when choosing between financial products.
The Power of Time: ₹1 Lakh at 10% p.a. (Annual CI)
| Years | Maturity (CI) | Total CI Earned | Simple Interest | CI Advantage |
|---|---|---|---|---|
| 5 yrs | ₹1,61,051 | ₹61,051 | ₹50,000 | +₹11,051 |
| 10 yrs | ₹2,59,374 | ₹1,59,374 | ₹1,00,000 | +₹59,374 |
| 15 yrs | ₹4,17,725 | ₹3,17,725 | ₹1,50,000 | +₹1,67,725 |
| 20 yrs | ₹6,72,750 | ₹5,72,750 | ₹2,00,000 | +₹3,72,750 |
| 30 yrs | ₹17,44,940 | ₹16,44,940 | ₹3,00,000 | +₹13,44,940 |
The Rule of 72 — How Fast Does Money Double?
The Rule of 72 is the fastest way to estimate doubling time: divide 72 by the annual interest rate. At 6%: doubles in 12 years. At 9%: doubles in 8 years. At 12%: doubles in 6 years. At 24%: doubles in 3 years. The rule is accurate within 0.1 years for rates between 6–15%. Use this calculator\'s "Years to Double" field for the exact figure — or use the Rule of 72 as a quick mental check on any investment pitch.
Compound Interest in India — Where It Applies
Every major savings and investment instrument in India uses compound interest in some form. Fixed Deposits (FD) typically compound quarterly — making the quarterly EAR the true return benchmark. Recurring Deposits (RD) apply CI on each monthly instalment separately. PPF and SSY compound annually on year-end balances. EPF compounds monthly but credits interest annually. NPS grows through NAV appreciation — the compounding equivalent in market-linked products. For Mutual Fund SIPs, returns compound through unit NAV growth rather than a fixed formula, making the expected rate variable.
Effective Annual Rate (EAR) — The Real Comparison Tool
When a bank offers 7.5% FD compounded quarterly, you do not earn 7.5%. You earn an EAR of 7.714% — because each quarter\'s interest is added to the base before the next quarter\'s interest is calculated. EAR = (1 + r/n)^n − 1. This matters enormously when comparing products: a 7.6% FD with quarterly compounding (EAR 7.777%) beats a 7.7% FD with annual compounding (EAR 7.700%). Always compute EAR before comparing fixed-income instruments. This calculator displays EAR automatically as you adjust inputs.
Formula verified against RBI interest computation guidelines and SEBI rate benchmarks. All reference table values independently verified via script. Last reviewed Jun 2026 by BankZop Financial Editorial Team.