Compound Interest Calculator
Unlike the lumpsum investment calculator above, this lets the compounding frequency vary (annual, half-yearly, quarterly, monthly) since bank deposits and bonds often compound more often than once a year.
A = P × (1 + r/n)(n×t), where P is the principal, r is the annual rate, n is the number of times interest compounds per year, and t is the number of years.
How to use this calculator
Enter the principal, the annual interest rate, how many times per year it compounds (1 for annual, 4 for quarterly, 12 for monthly), and the period in years. The calculator shows the interest earned and the final maturity value.
What this doesn't account for
This assumes the rate and compounding frequency stay fixed for the whole period and doesn't account for TDS on interest, which banks deduct at source above a threshold.
Frequently asked questions
What's the difference between this and the lumpsum calculator?
This lets you set a compounding frequency (annual, half-yearly, quarterly, monthly); the lumpsum calculator assumes annual compounding only. Otherwise the underlying math is the same.
Does more frequent compounding always mean more money?
Yes, all else equal, more frequent compounding produces a usually small additional gain, since interest starts earning its own interest sooner.
What compounding frequency do Indian bank fixed deposits use?
This varies by bank and product; check your specific FD's terms rather than assuming a frequency.
Does this account for TDS on interest?
No. Banks deduct tax at source on FD interest above a threshold; this calculator shows gross growth before any tax.
Is this the same formula banks use for recurring deposits?
No, a recurring deposit involves periodic contributions like a SIP, not a single principal. Use the SIP calculator to approximate a recurring deposit instead.
Can the interest rate change during the period?
This calculator assumes a constant rate for the whole period; a real product's rate could change, or could be fixed by contract, depending on what you're modelling.
Why is quarterly compounding more common in India than continuous compounding?
Continuous compounding is a mathematical limit rarely used in real products. Indian banks and post-office schemes typically compound quarterly or annually by convention, not out of mathematical necessity.
This is a generic financial calculation, not investment, loan or tax advice specific to you. BrokerLens is not a SEBI-registered investment adviser.