Daily Compound Interest Calculator India — 365-Day Compounding
Year-wise Growth · Contributions · Inflation Adjusted · Goal Planner
Daily compounding (365 periods/year) gives the maximum theoretical return on any stated interest rate. A savings account at 4% p.a. daily compounding gives an effective annual rate (EAR) of 4.08% — slightly higher than 4% quarterly (4.06%). For large investments over long periods, this difference compounds to significant rupees. Calculate exactly what daily compounding earns vs monthly, quarterly, and annual frequencies.
💹 Compound Interest Calculator
📅 Year-wise Breakdown
| Year | Opening Balance | Interest Earned | Closing Balance | Growth |
|---|---|---|---|---|
| 1 | ₹1,00,000 | ₹10,381 | ₹1,10,381 | |
| 2 | ₹1,10,381 | ₹11,459 | ₹1,21,840 | |
| 3 | ₹1,21,840 | ₹12,649 | ₹1,34,489 | |
| 4 | ₹1,34,489 | ₹13,962 | ₹1,48,451 | |
| 5 | ₹1,48,451 | ₹15,411 | ₹1,63,862 |
How to Use This Compound Interest Calculator
Enter your Principal, Annual Interest Rate, Time Period, and select Compounding Frequency. Click Calculate to instantly see maturity value, year-wise growth table, and interactive chart — no login required. Switch tabs for contributions, goal planning, and frequency comparison.
Compound Interest Formula Explained
A = P × (1 + r/n)nt — where P = Principal, r = rate (decimal), n = compounding freq/year, t = years. Example: ₹1,00,000 at 10% quarterly for 5 years: A = 1,00,000 × (1.025)20 = ₹1,63,862. Simple interest gives only ₹1,50,000 — CI gives ₹13,862 more!
Real-Life Compound Interest Examples India 2025
🏦 SBI FD (7.1%): ₹10L for 5 years → ₹14.13L maturity (quarterly compounding). 📮 PPF (7.1%): ₹1.5L/year for 15 years → ₹40.68L (tax-free). 📈 Nifty 50 SIP: ₹5,000/month at 12% for 20 years → ₹49.96L (invested ₹12L). 🎓 Child Education: ₹2L today at 12% for 18 years → ₹19.46L for college.
Compound Interest vs Simple Interest
For ₹5,00,000 at 8% for 10 years — Simple Interest: ₹9,00,000. Compound Interest (Quarterly): ₹11,10,537 — ₹2,10,537 more! The power of compounding grows exponentially. At 20 years, the difference triples. Start investing early — even 5 extra years can add lakhs to your corpus.
Frequently Asked Questions
What is the effective annual rate (EAR) for daily compounding?
EAR = (1 + r/n)^n − 1, where n = 365 for daily. At 8% nominal: Daily EAR = (1 + 0.08/365)^365 − 1 = 8.328%. Monthly EAR = 8.300%. Quarterly EAR = 8.243%. Annual EAR = 8.000%. The more frequent the compounding, the higher the effective yield — approaching continuous compounding (e^r − 1) as the limit. At 8%, continuous compounding EAR = 8.329% — nearly identical to daily.
Which Indian banks or investments use daily compounding?
Most Indian bank savings accounts: interest calculated daily on end-of-day balance, credited quarterly. So effective compounding is quarterly despite daily calculation. SBI, HDFC, ICICI savings: typically 3–4% p.a., daily calculation. Liquid mutual funds: NAV updated daily — effectively daily compounding. Overnight funds, ultra-short funds: daily NAV growth. Bank FDs: technically quarterly compounding per RBI guidelines, not daily.
Is daily compounding significantly better than monthly for long-term investments?
The difference is surprisingly small. ₹1L at 10% for 20 years: Monthly → ₹7,32,817 | Daily → ₹7,38,910 — difference of ₹6,093 (less than 1%). The bigger impact on your corpus comes from: rate difference (10% vs 11% matters far more), duration (1 extra year), and additional contributions. Chase higher returns over longer periods instead of optimizing compounding frequency.
How does continuous compounding compare to daily in India?
Continuous compounding is a mathematical limit (infinite compounding periods). Formula: A = P × e^(rt). At 10% for 10 years: Continuous → ₹2,71,828 vs Daily → ₹2,71,791 — difference of just ₹37 per lakh. Continuous compounding exists in theory and some derivative pricing models. No mainstream Indian investment uses continuous compounding. Daily is effectively the real-world maximum.