Compound interest is interest paid on interest. Simple interest only ever pays on the amount you started with, so it grows in a straight line. Compound interest pays on the whole balance — including everything it has already earned — so every period starts from a bigger number and the curve bends upward. Given enough years, that bend is what does almost all of the work.
This calculator handles both a starting amount and money added every month, and lets you pick how often interest is added: yearly, quarterly, monthly or daily. Pick your country from the header and every figure appears in your own currency and convention — ₹ lakh and crore, $ or £ million, 万 in East Asia.
Less than most people expect. On a nominal 8%:
Yearly → effective 8.00% · Quarterly → 8.24% · Monthly → 8.30% · Daily → 8.33%
The jump from yearly to monthly is worth about a third of a percentage point. The jump from monthly to daily is worth almost nothing. The rate and the number of years matter far more than the frequency — which is why the years slider moves your result more than anything else on this page.
Savings and deposits. Banks quote a nominal rate and an effective one — APY in the US, AER in the UK. The effective figure this calculator reports is the one to compare between products.
India. Fixed deposits compound quarterly by convention; the FD / RD calculator uses the exact bank formula including recurring deposits.
Investments. Funds do not literally pay compound interest, but reinvested returns behave the same way. For monthly investing use the SIP calculator; for a single amount, Lumpsum.
Debt compounds too. Credit card interest is usually compounded monthly on the outstanding balance, which is exactly this maths running against you.
How long to double my money? Divide 72 by the rate — the rule of 72. At 8% roughly 9 years, at 12% about 6.
Is the interest taxed? This page reports pre-tax growth. Tax on interest differs sharply by country and by the type of account, so check your own rules — a tax-sheltered account changes the answer completely.
Does inflation eat this? Yes, and it is worth checking. Run the same rate through Advanced Inflation to see the real return once prices are accounted for.
