Compound Interest Calculator
Calculate compound interest over time for Indian bank deposits
Discover the power of compound interest - where your interest earns interest. See how your money grows exponentially with different compounding frequencies.
Calculate Returns
💡 Tip: More frequent compounding (daily vs yearly) results in higher returns!
Understanding Compound Interest
What is Compound Interest?
Compound interest is the interest calculated on the initial principal, which also includes all the accumulated interest from previous periods. It's often called "interest on interest."
- Your money grows exponentially, not linearly
- Time is your best friend - the longer you invest, the more you earn
- Used by banks, fixed deposits, and many investment schemes
Indian Bank Applications
Most Indian banks use compound interest for various savings and investment products:
- Fixed Deposits: Typically quarterly compounding at 5-7.5% p.a.
- Recurring Deposits: Monthly contributions with quarterly compounding
- Savings Accounts: Daily/Quarterly compounding at 3-4% p.a.
- Post Office Schemes: Various products with annual/quarterly compounding
Compounding Frequencies
Key Benefits
- Exponential Growth: Your wealth grows faster over time
- Passive Income: Earn money without any effort
- Wealth Building: Perfect for long-term financial goals
- Beat Inflation: Compound returns help maintain purchasing power
The Formula
This calculator uses the compound interest formula to calculate the final amount:
A = P × (1 + r/n)^(n×t) Effective Annual Rate: The calculator also shows the effective annual rate (EAR), which is the actual rate you earn considering the compounding effect: (1 + r/n)^n - 1
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