Compound interest means your interest earns interest. Each time interest is calculated — monthly, quarterly, or annually — it gets added to the principal, and the next calculation is on that larger amount. Over time, this creates a snowball effect where growth accelerates the longer you stay invested.

This calculator handles both lump sum investments and regular monthly contributions — so you can plan a one-time FD, a PPF investment, a mutual fund SIP, or any scenario where money grows at a fixed rate over time. The year-by-year table shows exactly how your corpus builds up each year, not just the final number.

Growth Reference Table (Monthly Compounding)

How ₹1 lakh grows at different rates over time. Monthly compounding, no additional contributions.

Principal	Rate	5 Years	10 Years	15 Years	20 Years
₹1,00,000	6%	₹1,34,885	₹1,81,940	₹2,45,409	₹3,31,020
₹1,00,000	8%	₹1,48,985	₹2,21,964	₹3,30,693	₹4,92,680
₹1,00,000	10%	₹1,64,701	₹2,71,264	₹4,46,774	₹7,35,809
₹1,00,000	12%	₹1,81,940	₹3,31,020	₹6,02,258	₹10,95,750
₹5,00,000	10%	₹8,23,504	₹13,56,321	₹22,33,868	₹36,79,045
₹10,00,000	12%	₹18,19,397	₹33,10,204	₹60,22,575	₹1,09,57,503

At 12% monthly compounding: ₹1 lakh becomes ₹3.31 lakh in 10 years and ₹10.96 lakh in 20 years — without adding a single rupee extra.

Power of Monthly Contributions

Starting with ₹0, investing ₹5,000 per month at 10% annual rate — monthly compounding.

Monthly SIP	5 Years	10 Years	20 Years	Total Invested	Interest Earned (20yr)
₹2,000	₹1,55,762	₹4,13,818	₹15,28,376	₹4,80,000	₹10,48,376
₹5,000	₹3,89,407	₹10,34,544	₹38,20,939	₹12,00,000	₹26,20,939
₹10,000	₹7,78,814	₹20,69,089	₹76,41,878	₹24,00,000	₹52,41,878
₹20,000	₹15,57,628	₹41,38,178	₹1,52,83,757	₹48,00,000	₹1,04,83,757

Investing ₹5,000/month at 10% for 20 years: you invest ₹12 lakh total but receive ₹38.21 lakh — the extra ₹26.21 lakh is purely compound interest.

How to Use This Calculator

Enter Initial Investment — the lump sum you’re investing today (enter 0 if starting fresh with only monthly contributions)
Enter Monthly Contribution — the amount you’ll add every month (enter 0 for lump sum only)
Enter Annual Interest Rate — use 7% for FD/PPF, 10–12% for long-term equity mutual funds
Set the Time Period in years
Select Compounding Frequency — Monthly gives the highest returns, Annually the lowest
Results and year-by-year table update instantly

Tip: Set initial investment to 0 and enter a monthly amount to simulate a SIP. Set monthly contribution to 0 and enter a lump sum to simulate an FD or PPF.

Features

Supports both lump sum and monthly contribution — or a combination of both
Four compounding frequencies: Monthly, Quarterly, Semi-Annually, Annually
Year-by-year breakdown table — see opening balance, amount invested, interest earned, and closing balance for every year
Visual growth chart — shows the widening gap between invested amount and total corpus over time
Works for FD, PPF, mutual funds, NPS, or any fixed-rate investment scenario

Simple Interest vs Compound Interest — What’s the Real Difference?

With simple interest, you earn the same fixed amount every year on your original principal. With compound interest, each year’s interest is added to the base, so the next year’s interest is calculated on a larger amount.

On ₹1 lakh at 10% for 10 years: simple interest gives ₹1,00,000 in interest (₹10,000/year × 10). Compound interest (annual) gives ₹1,59,374 in interest — that’s ₹59,374 more from the same principal, same rate, same time. The difference gets dramatically larger with longer tenures.

This is why starting early matters more than investing a larger amount later. A ₹1 lakh investment at age 25 at 10% becomes ₹19.19 lakh by age 65. The same ₹1 lakh invested at age 35 becomes only ₹7.40 lakh by age 65 — 10 fewer years cuts the final amount by more than half.

Frequently Asked Questions

At 10% with monthly compounding, ₹50,000 grows to approximately ₹82,350 after 5 years. Interest earned: ₹32,350. With annual compounding, the maturity is ₹80,526 — slightly lower, showing the real impact of compounding frequency.

Monthly compounding gives the highest returns, followed by quarterly, semi-annual, and annual. The difference is small on short tenures but adds up significantly over 10–20 years. On ₹1 lakh at 10% for 20 years: monthly compounding gives ₹7,35,809 vs annual compounding’s ₹6,72,750 — a difference of ₹63,059 from the same rate.

A SIP (Systematic Investment Plan) uses the compound interest formula but applies it to each monthly installment separately, since each installment compounds for a different number of months. This calculator handles that correctly when you enter a monthly contribution amount. The SIP Calculator on EzyToolz is specifically built for mutual fund SIP calculations with step-up options.

Using the Rule of 72: divide 72 by the interest rate. At 10%, money doubles in roughly 7.2 years. At 12%, it doubles in 6 years. At 8%, it takes 9 years. This rule gives a quick mental estimate — use the calculator for the exact figure.

PPF interest is calculated monthly based on the minimum balance between the 5th and last day of each month, but it is credited annually at the end of the financial year. For PPF calculations, use annual compounding in this calculator and enter 7.1% (current PPF rate for FY 2025–26).

With monthly compounding at 12%, ₹1 lakh grows to approximately ₹3,31,020 in 10 years. Total interest earned: ₹2,31,020 — more than double the original investment, without adding a single rupee extra.