Annuity Calculator
Build the future value of an annuity with monthly payments, interest and payment timing. Plan guaranteed income.
Annuity value
₹23,00,387
Payments at the end of each month
Total invested
₹12,00,000
Interest earned
₹11,00,387
Growth
92%
Over 120 months
Assumes monthly compounding at a fixed rate. Annuity products in India (LIC and others) often guarantee only part of the return — the rest depends on how the insurer invests. Returns are not guaranteed.
Last updated: April 2026
How this calculator is verified
Checked by True Calculator automated test suite on
- Formula verified against a published worked example in the automated test suite
- Edge cases (zero, negative, boundary and unit-mismatch inputs) covered by unit tests
The full verification method is on our how we verify page. Found an error? Tell us and we will re-check it.
When to Use This Calculator
Use this calculator when evaluating annuity and pension-style products — the accumulation phase of the plan — or when you simply want to see what regular monthly savings grow into at a fixed assumed rate. It is frequently used by retirees planning a corpus: the projected value becomes the starting input for the annuity payout calculator, which converts it into monthly income. Because it isolates the mathematics, it lets you compare products on identical assumptions instead of relying on glossy illustrations with different rates. For India-based investors it also serves as a conservative growth model against which market-linked alternatives can be judged — if a fund's projected SIP result is barely above this fixed-rate projection, the extra risk may not be worth it. The result is pre-tax, so adjust for slab-rate taxation on the interest portion.
How to Use This Calculator
- Step 1: Choose whether payments are made at the end (ordinary) or start (due) of each month.
- Step 2: Enter the monthly amount you plan to pay into the annuity.
- Step 3: Set the expected annual return — be conservative, since Indian annuity products rarely guarantee high rates.
- Step 4: Enter the accumulation period in years and read the annuity value, invested amount, and interest earned.
Worked Example
Suresh pays ₹10,000 per month into a deferred annuity earning 12% per year for 10 years. With end-of-month payments the corpus reaches about ₹23,00,387, against ₹12,00,000 he put in — ₹11,00,387 of interest. If his payments were made at the start of each month, the same inputs give roughly ₹23,23,391, about ₹23,000 more, because every payment earns one extra month of interest. Small timing and rate differences visibly change the final corpus.
Tips and Common Mistakes
- •Tip 1: Compare at least two insurers' annuity rates before committing — guaranteed rates vary and matter over decades.
- •Tip 2: Use a rate below the marketed figure to stress-test whether the target corpus still works.
- •Tip 3: Start young: 10 years of ₹10,000 monthly beats 5 years of ₹20,000 monthly because compounding needs time.
- ✗Mistake 1: Avoid buying annuity plans with charges you have not compared — high charges silently shrink the compounding base.
- ✗Mistake 2: Avoid locking the whole retirement fund into one annuity; keep part liquid for emergencies and inflation.
Frequently Asked Questions
What is an annuity in this calculator?
An annuity is a series of equal payments made at regular intervals. Here you build up the future value of monthly payments that earn interest until a target date — the same math used to estimate the corpus a pension-style product can accumulate.
What is the difference between ordinary annuity and annuity due?
An ordinary annuity pays at the end of each period; an annuity due pays at the start. Because due payments earn one extra month of interest each period, the due value is slightly higher — for ₹10,000/month at 12% over 10 years, ₹23.24 lakh vs ₹23.00 lakh.
Do Indian annuity products earn a fixed return?
Most Indian deferred annuity plans from insurers guarantee only a modest rate; the rest of the return depends on the insurer's investments. Use the calculator with a conservative rate, and treat the result as a planning estimate rather than a promise.
How is annuity income taxed in India?
The interest portion of annuity payouts is taxed at your income slab rate. For deferred annuities, the maturity amount can also have tax implications depending on the policy type. A tax advisor can map the specific product to your situation.
How is this different from a SIP?
A SIP invests in market-linked mutual funds with no guaranteed return; this calculator compounds at a fixed rate you choose. The accumulation math is similar, which is why the two calculators often show close figures — but the risk profiles differ completely.
Compare these tools
- Future Value Calculator — Find what your money grows into with compound interest at any frequency
- Gratuity Calculator (India) — Calculate gratuity under the Payment of Gratuity Act, 1972 with the 15/26 formula and the ₹20 lakh tax-exempt cap for Indian employees
- GST Calculator (India) — Add or remove GST from any amount, with CGST + SGST split for intra-state and IGST for inter-state supplies
You might also need
Related calculators from other categories
Statistics
Chi-Square Calculator
Run a chi-square goodness-of-fit test from observed and expected counts. Get the statistic, degrees of freedom and p-value.
Statistics
Correlation Coefficient Calculator
Compute the Pearson correlation coefficient between two data series. See r, r² and the direction and strength of the relationship.
Statistics
Critical Value Calculator
Find critical values for z, t, chi-square and F tests at any significance level, one- or two-tailed, with degrees of freedom for ANOVA.
Math
Geometric Mean Calculator
Find the geometric mean of a set of positive numbers instantly for growth and ratio analysis.