What is the compound interest formula?

CI = P × (1 + r/n)^(nt) - P, where P is principal, r is annual rate, n is compounding frequency and t is time in years.

What is the difference between simple and compound interest?

Simple interest is calculated only on principal. Compound interest is calculated on principal plus accumulated interest, giving higher returns over time.

How often does FD compound interest?

Most Indian bank FDs compound quarterly. Some compound monthly. Select the frequency in the calculator for accurate results.

Is this compound interest calculator free?

Yes, completely free at forjitai.in. No signup required.

Compound Interest Calculator India — CI Formula Online Free

The Power of Compound Interest in India

Compound interest is often called "the eighth wonder of the world." Unlike simple interest (calculated only on the principal), compound interest earns returns on your previous returns — exponentially growing your wealth over time.

Formula: A = P × (1 + r/n)^(nt), where P = principal, r = annual interest rate, n = compounding frequency per year, t = time in years.

A ₹1 lakh investment at 12% annual compounding for 20 years grows to ₹9.65 lakh — nearly 10x the original amount. The same amount at simple interest would only reach ₹3.4 lakh. That's the power of compounding.

Compounding Frequency Matters

Annual compounding: Interest added once per year (PPF, some FDs)
Quarterly compounding: Interest added 4 times/year (most bank FDs in India)
Monthly compounding: Interest added 12 times/year (RDs, savings accounts)
Daily compounding: Interest added 365 times/year (some savings accounts)

More frequent compounding = slightly higher effective yield. A 7% rate compounded quarterly gives an effective annual yield of 7.19%. Use the calculator above to compare compounding frequencies.

Compound Interest in Indian Investments

PPF (Public Provident Fund): 7.1% compounded annually. Government-backed, tax-free maturity. 15-year lock-in.
Bank Fixed Deposits: 6.5–8% compounded quarterly. Senior citizen rates are 0.25–0.50% higher.
Recurring Deposits: Similar to FD rates, compounded quarterly.
NSC (National Savings Certificate): 7.7% compounded annually. 5-year lock-in, qualifies for 80C deduction.
Mutual Funds (Equity): Market-linked, historically 10–14% CAGR over 10+ years.

Frequently Asked Questions

How is compound interest different from simple interest?

Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus all previously earned interest. Over long periods (10+ years), the difference becomes enormous — compound interest grows exponentially while simple interest grows linearly.

Which Indian investment gives the best compound interest?

For guaranteed compound interest, PPF at 7.1% (tax-free) and NSC at 7.7% are strong options. For higher potential returns, equity mutual funds compounding at 10–14% CAGR over 10+ years outperform all fixed-income instruments — but carry market risk.

What is the Rule of 72?

The Rule of 72 is a quick formula to estimate how long it takes to double your money. Divide 72 by the annual interest rate. At 12% returns, your money doubles in 72÷12 = 6 years. At 7.1% (PPF), it doubles in ~10 years.

Compound Interest Calculator

Year-wise Growth

📐 Formulas

The Power of Compound Interest in India

Compounding Frequency Matters

Compound Interest in Indian Investments

Frequently Asked Questions

🔗 Related Tools