Interest Calculator
Calculate simple or compound interest on any amount, rate and period in rupees.
Interest earned
₹27,024
Total amount
₹1,27,024
Compounding periods
36
months
Compound interest is calculated on the principal plus previously earned interest, so your money grows faster with more frequent compounding.
Interest Calculator on True Calculator gives you an instant, accurate answer with no sign-up and no app install. Calculate simple or compound interest on any amount, rate and period in rupees. Every result shows the formula and a worked example so you can verify the calculation yourself, and all values are computed in your own browser — your numbers never leave your device.
Popular uses: interest calculator · simple interest calculator · compound interest calculator
How We Calculate
This calculator uses standard financial formulas verified by our team. All calculations are performed instantly in your browser using JavaScript — no data is sent to any server.
We use RBI-approved formulas and regularly updated bank rates. All rates and standards are sourced from official government and regulatory websites.
When to Use This Calculator
Use the interest calculator whenever you are quoted a rate and want to know what it actually earns or costs. It is the quickest way to compare a fixed deposit, a savings account sweep-in, or a loan you are considering, because the same amount can look very different under simple versus compound treatment. Before locking a lump sum into a bank FD, check what quarterly compounding produces over your planned tenure; before comparing two loan offers, run both rates through the same tool so you are comparing like with like. It is equally useful for short-term planning — a ₹1,00,000 deposit for a marriage or house deposit in 2–3 years — and for understanding why banks advertise 'effective yield' separately from the headline rate. Returns shown assume the rate stays constant for the full period.
How to Use This Calculator
- Step 1: Choose simple or compound interest — compound is what deposits and most loans use.
- Step 2: Enter the principal amount, the annual rate and the time in years.
- Step 3: For compound interest, pick the compounding frequency that matches the product (quarterly for most bank FDs).
- Step 4: Compare the interest and total between modes and frequencies to see how compounding changes the result.
Worked Example
₹1,00,000 at 8% p.a. for 3 years earns ₹24,000 with simple interest, giving ₹1,24,000 in total. Compounded monthly the same deposit earns ₹27,024 and grows to ₹1,27,024 — about ₹3,024 more for doing nothing except letting interest compound. A smaller deposit shows the same pattern: ₹10,000 at 6% for 2 years earns ₹1,255 when compounded half-yearly versus ₹1,200 with simple interest. Frequency matters more as the rate and time rise.
Tips and Common Mistakes
- •Match the compounding frequency to the product — Indian bank FDs compound quarterly.
- •Interest on deposits is taxable at your slab rate and banks deduct TDS above ₹40,000 (₹50,000 for seniors).
- •Use compound mode for loans too — EMIs are built on monthly compounding of the reducing balance.
- ✗Do not assume simple and compound results are close — over long tenures the gap grows into real money.
- ✗Do not forget TDS on deposit interest when planning your net income from savings.
Frequently Asked Questions
What is the difference between simple and compound interest?
Simple interest is charged only on the principal, so a ₹1,00,000 deposit at 8% for 3 years earns ₹24,000. Compound interest also earns interest on previous interest — the same deposit compounded monthly earns about ₹27,024.
Which one do Indian fixed deposits use?
Banks compound deposit interest quarterly, while many loans quote simple interest on reducing balances. This calculator lets you pick yearly, half-yearly, quarterly or monthly compounding to match the product.
Is the interest shown before or after tax?
Before tax. Interest on deposits is taxable at your slab rate and banks deduct TDS above ₹40,000 (₹50,000 for senior citizens) per financial year. Your net interest is lower than the figure shown.
How often should interest compound for best returns?
More frequent compounding earns slightly more. Monthly compounding beats yearly compounding on the same rate and principal, though the difference shrinks as rates fall — compare both modes to see it.
Can I use this to plan an emergency fund?
Yes — enter your target amount as the principal and check what a liquid fund or sweep-in deposit might earn. Keep the emergency fund liquid and the rate modest, since returns are never guaranteed.
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