Simple vs Compound Interest Calculator India — SI vs CI
Year-wise Growth · Contributions · Inflation Adjusted · Goal Planner
Simple interest calculates only on principal. Compound interest calculates on principal + accumulated interest. The gap is small in year 1 but massive over decades — at 10% for 30 years, compound interest gives 6.7x return vs simple interest's 4x. Every Indian investment — FD, PPF, RD, bonds — uses compound interest. This calculator shows exactly how much more compound interest earns versus simple, year by year.
💹 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 key difference between simple and compound interest?
Simple Interest (SI): interest calculated only on original principal. Formula: SI = P × R × T. Compound Interest (CI): interest calculated on principal + previous interest (interest on interest). Formula: A = P(1+r/n)^nt. For short durations (1–2 years), difference is small. Over 10+ years, CI dramatically outperforms. At 10% for 20 years: SI doubles principal once, CI grows it 6.7× — the extra 4.7x comes purely from reinvested interest.
When is simple interest used in India?
Simple interest is used in: personal loans (flat rate), car loans (some lenders), gold loans, certain government schemes, Treasury Bills. Compound interest is used in: bank FDs, savings accounts, PPF, NSC, home loans (EMI structure), credit card outstanding, mutual funds NAV. Important: EMI loans are not simple interest — they use reducing balance (a form of compound interest where interest calculated on outstanding principal monthly).
Which gives more money: SI or CI?
Compound interest ALWAYS gives more than simple interest (for same rate and time, when you are the investor). For same 1-year period: equal (both give P×r). Beyond 1 year: CI > SI, gap grows exponentially. But when you are the borrower: CI means you pay MORE interest. Credit card at 36% p.a. compounded monthly is devastating — ₹1L balance unpaid for 2 years becomes ₹2.05L in interest alone.
How much more does compound interest earn over 10, 20, 30 years?
₹1,00,000 at 10% p.a. (quarterly compounding): 10 years → CI: ₹2,68,506 vs SI: ₹2,00,000 (+34%). 20 years → CI: ₹7,20,957 vs SI: ₹3,00,000 (+140%). 30 years → CI: ₹19,34,841 vs SI: ₹4,00,000 (+383%). The lesson: start early, reinvest returns, never break compounding. Each extra year at the end matters less than each extra year at the beginning.