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    We found 112 Compound Interest Formula

    Institution Name
    Deposit Amount Range
    Tenure Range
    Interest Rate
    Up to ₹25L
    1 Year to 5 Years
    7.49% - 8.19% Monthly compounding
    Response Time Within 30 minutes
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    Up to ₹25L
    1 Year to 5 Years
    7.75% - 8.5% Monthly compounding
    Response Time Within 30 minutes
    Features
    Highlights
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    Good to Know
    Up to ₹1Cr
    7 Days to 20 Years
    5% - 8% Quarterly compounding
    Response Time Within 30 minutes
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    Up to ₹1Cr
    7 Days to 10 Years
    4% - 7.25% Quarterly compounding
    Response Time Within 30 minutes
    Features
    Highlights
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    Good to Know
    Up to ₹1Cr
    7 Days to 10 Years
    4.25% - 7.05% Monthly compounding
    Response Time Within 30 minutes
    Features
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    Good to Know
    Up to ₹1Cr
    15 Days to 20 Years
    4.25% - 7.25% Monthly compounding
    Response Time Within 30 minutes
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    Good to Know
    Up to ₹1Cr
    7 Days to 10 Years
    4% - 7% Monthly compounding
    Response Time Within 30 minutes
    Features
    Highlights
    Documents
    Good to Know
    NRI - FD
    Up to ₹1Cr
    1 Year to 5 Years
    6.5% - 6.8% Monthly compounding
    Response Time Within 30 minutes
    Features
    Documents
    Good to Know
    NRI - FD
    Up to ₹1Cr
    1 Year to 10 Years
    6% - 6.75% Monthly compounding
    Response Time Within 30 minutes
    Features
    Highlights
    Documents
    Good to Know
    NRI - FD
    Up to ₹1Cr
    1 Year onwards
    6.25% - 6.5% Monthly compounding
    Response Time Within 30 minutes
    Features
    Highlights
    Documents
    Good to Know
    Up to ₹1Cr
    7 Days to 10 Years
    4% - 7.30% Quarterly compounding
    Response Time Within 30 minutes
    Features
    Highlights
    Documents
    Good to Know
    NRI - FD
    Up to ₹1Cr
    1 Year to 5 Years
    6.80% Quarterly compounding
    Response Time Within 30 minutes
    Features
    Highlights
    Documents
    Good to Know
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  • Compound Interest Formula Reviews

    • Kotak Fixed Deposit
      "Good service"
      0.5 4.0/5 "Great!"
      Of course even foreclosure of FD, can be done through the mobile application of KOTAK . Also it is easy to compare the rates on the net banking and it is excellent too. When I placed a request for liquidation it takes about 2 hours of time and it is very easy to change the maturity instruction through the mobile app.
      Was this review helpful? 0
      , kolkata
      Reviewed on Aug 17, 2017
    • SBI Fixed Deposit
      "Good FD process"
      0.5 5.0/5 "Blown Away!"
      I am very much comfortable with the FD PROCESS followed by SBI . All I had to do is, I have to just go online and place a request for FD. The information about the FD interest rate are also available online and it is very easy to find that too. No tax benefits and any time i can liquidate the funds by breaking the funds online , the same is not the case with other banks where there would be charge else it would be done the next day with SBI it is done on the same day and that is the biggest advantage here.
      Was this review helpful? 0
      , bangalore
      Reviewed on Aug 16, 2017
    • SBI Fixed Deposit
      "Future saving plan for child"
      0.5 4.0/5 "Great!"
      I have invested Rs.50,000 for my child in fixed deposit, when child turns age of 7 years old, she will be get double the money from SBI. I have invested in the age of 2 years of age. After maturity, they gave one written bond using that I should get the return.
      Was this review helpful? 0
      , berhampur
      Reviewed on Aug 11, 2017
    • HDFC Bank Fixed Deposit
      "Average service"
      0.5 3.0/5 "Satisfactory"
      I have opened a Fixed deposit account with 50lakhs from HDFC bank. The customer service is not up to the mark. There was no personalize service is available with HDFC bank.The customer service need to be customer centric in future. The rate of interest is nominal with Hdfc bank. I would like to suggest HDFC bank to focus on their service.
      Was this review helpful? 0
      , vadodara
      Reviewed on Aug 11, 2017
    • Punjab National Bank Fixed Deposit
      "Scheme is good"
      0.5 5.0/5 "Blown Away!"
      PNB Fixed deposit scheme is very good, yes it is a good bank. I am using this bank account for about 15 years . My parents are holding an account there which prompted me to open this account with this bank, it is a reputed bank too so I had taken FD from this bank. Interest rate 9%for FD and I do get tax benefit from this FD
      Was this review helpful? 0
      , new delhi
      Reviewed on Aug 11, 2017
    • SBI Fixed Deposit
      "Very good"
      0.5 5.0/5 "Blown Away!"
      SBI FD is actually very good, I had opted for this through online no charges for the same. I had never been to the branch for renewal for maturity or for pre -renewal. I am getting some sort of messages about the deposits we can also change the maturity instruction we can also change the tenure but not the amount.
      Was this review helpful? 0
      , gandhidham
      Reviewed on Aug 10, 2017
    • Shriram Finance Fixed Deposit
      "Good invest and best service"
      0.5 5.0/5 "Blown Away!"
      I have opened the fixed deposit in Shriram Transport finance through online channel, then I have deposited the amount of Rs.10,000 for the tenure of one years, After the tenure period I would be getting totally around Rs.10,700, they gave me the interest rate of 7.4%.
      Was this review helpful? 0
      , kanchipuram
      Reviewed on Aug 08, 2017
    • Shriram City Fixed Deposit
      "Customer service is the best"
      0.5 5.0/5 "Blown Away!"
      Customer service executive named karthik had spoken to me, he had filled the form and completed all the formalities he advised me to send my pan card to his email id . Online executive explained me about the terms and conditions and the interest rate is the best there.
      Was this review helpful? 0
      , kanchipuram
      Reviewed on Aug 08, 2017
    • IDBI Fixed Deposit
      "Trustworthy"
      0.5 5.0/5 "Blown Away!"
      IDBI has provided the best of services always I have a fixed deposit as well with them. I only have to get the bond and sign the same. They would will up the rest of the details and process it. I do not have to double check as they have always been trustworthy.
      Was this review helpful? 0
      , chennai
      Reviewed on Aug 07, 2017
    • State Bank of Bikaner Jaipur Fixed Deposit
      "Very good fixed deposit"
      0.5 3.0/5 "Satisfactory"
      SBBJ offers the best interest rate so I can place my trust on them. Actually when I was with MNC I was in need of a PF account at that time no other bank was offering ONLY SBBJ was ready to provide a PF along with that you had a opened a FIXED deposit. I do have an online access too and their interest rate is good.
      Was this review helpful? 0
      , udaipur
      Reviewed on Aug 07, 2017
    • HDFC Bank Fixed Deposit
      "Good return"
      0.5 4.0/5 "Great!"
      I had fixed deposit with HDFC, I got the additional benefits I could withdraw the amount without any charges, I have invested the amount of Rs.3 lakhs for the tenure of 2.5 years. I closed the FD within one and half y ear, they gave me special interest rate around 8% .
      Was this review helpful? 0
      , hyderabad
      Reviewed on Aug 03, 2017
    • HDFC Bank Fixed Deposit
      "If you have it, use it"
      0.5 3.0/5 "Satisfactory"
      I am having fixed deposit account with the HDFC bank and am using it from the last one year of time. Service aspects are really alright one with them. Rate of interest is fine one for me till now. Minimum lock in period could be around three months of time and I used to do it through online mode.
      Was this review helpful? 0
      , pune
      Reviewed on Aug 03, 2017
    • Central Bank of India Fixed Deposit
      "CBI is the best bank for Fixed Deposit"
      0.5 4.5/5 "Excellent!"
      HI! This is Santosh, I had been using from last 8 years with best service without any issue. This Bank Fixed Deposit rate of interest is higher then other banks. The Banking and services are good, There is no Fixed deposit breaking charges. I will recommend this Bank for the Best FD services.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jul 18, 2017
    • HDFC Bank Fixed Deposit
      "Go ahead with your choice"
      0.5 4.0/5 "Great!"
      I have the fixed deposit account with the HDFC bank and I been with them from the last three to four years of time. The rate of interest was reduced as of now but I have got it as fixed. Customer service and other things are really okay and I have not interacted with them.
      Was this review helpful? 1
      , chennai
      Reviewed on Jul 06, 2017
    • SBI Fixed Deposit
      "Wonderful "
      0.5 4.0/5 "Great!"
      I had the fixed deposit account with the State bank of India and the interest rate was around 6% to 7% before three years of time. Response and other aspects are good enough. Customer service was also good one and their online banking services are up to the mark.
      Was this review helpful? 6
      , visakhapatnam
      Reviewed on Jul 03, 2017
    • ICICI Bank Fixed Deposit
      "Its Good"
      0.5 4.0/5 "Great!"
      In terms of interest rate, ICICI IS providing lower benefits for Fixed deposit account. For premature they not calculating the proper interest rate. It would be better to give clear information about interest rate calculation within the period of transaction.
      Was this review helpful? 4
      , chennai
      Reviewed on Jun 30, 2017
    • SBI Fixed Deposit
      "Its Average"
      0.5 2.0/5 "Expected more"
      I am having recurring deposit with SBI, I opened the RD by visiting SBI branch. On the same day RD account got activated. But I felt interest rate is low they offering only 7.1% of interest, I have invested the amount of Rs. 1 lakh for the tenure of 15 month, after maturity of the RD. I would be getting the return around 1.08 lakh.
      Was this review helpful? 3
      , ahmedabad
      Reviewed on Jun 30, 2017
    • ICICI Bank Fixed Deposit
      "Good for tax saving "
      0.5 5.0/5 "Blown Away!"
      I have opened the fixed deposit through ICICI I mobile application, I have invested the amount of Rs.5000 for the tenure of five years. After the tenure I would be getting Rs.20,000 as a return. I could track the fixed deposit details over the netbanking.
      Was this review helpful? 5
      , bangalore
      Reviewed on Jun 29, 2017
    • HDFC Bank Fixed Deposit
      "Best"
      0.5 4.0/5 "Great!"
      I do have fixed deposit account with the HDFC bank and the interest rate is common one with every bank like it used to get varied up to 0.5% . Penalty charges are nil with them for the premature withdraw, which is the really good one.
      Was this review helpful? 5
      , chennai
      Reviewed on Jun 22, 2017
    • SBI Fixed Deposit
      "Good Service"
      0.5 4.0/5 "Great!"
      When I have started to deposit the money I was getting good interest rate but know the rate of interest is decreased with SBI Fixed deposit. I have started the fixed deposit around 6 years ago with SBI. Initially I got around 9.5% as interest rate but now I am getting only 7.5% interest rate. The service with State is good.
      Was this review helpful? 6
      , bangalore
      Reviewed on Jun 22, 2017
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    Compound Interest Formula is Rated as "Excellent!" by 1769 Users

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    Compound Interest Overview

    Gone are the days of school mathematics, most of us easily forget, but a quick refresher may bring it all back. To understand compound interest in the easiest form, let’s take a look at what it means. Compound interest is a useful financial concept in which your interest earned is added to your principal. This amount then continues to earn more interest. So in this case, you also earn interest on the interest you’ve already earned. So your balance grows at an increasing rate. In a sense, you reinvest your interest, rather than receiving a pay-out.

    • Year 1 - You earn interest on your Principal.
    • Year 2 - You earn interest on your (Principal + Interest of Year 1).
    • Year 3 - You earn interest on your (Principal + Interest of Year 1 + Interest of Year 2).

    Compound interest is the basis of long-term growth of the stock market. It forms the basis of personal savings plans. Compound interest also affects inflation.

    Types of Compound Interest

    There are generally two types of compound interest used.

    • Periodic Compounding - Under this method, the interest rate is applied at intervals and generated. This interest is added to the principal. Periods here would mean annually, bi-annually, monthly, or weekly.
    • Continuous Compounding - This method uses a natural log-based formula and calculates interest at the smallest possible interval. This interest is added back to the principal. This can be equalled to the constant rate of growth for all natural growth. This figure was born out of physics. It uses Euler’s number which is a famous irrational number which is known to more than 1 trillion digits of accuracy. Euler’s number is denominated by the letter “E”.

    Periodic Compound Interest Formula Overview

    There are two formulas you can use to calculate compound interest, depending on what result you wish to find out. You can find out the following:

    • The total value of the deposit.
    • The total compound interest earned.

    Value of the Deposit

    Formulas can be a deterrent to many. If you aren’t savvy with math, your eyes turn away from these codes or just skip them altogether. But once it’s explained, it’s pretty simple to understand. To calculate the total value of your deposit, the formula is as follows:

    P (1+ i/n)nt

    P = Principal invested.

    i = Nominal Rate of Interest.

    n = Compounding Frequency or number of compounding periods in a year.

    t = Time, meaning the length of time the interest is applicable, generally in years.

    Simply put, you calculate the interest rate divided by the number of times in a year the compound interest is generated. For instance, if your bank compounds interest quarterly, there are 4 quarters in a year, so n = 4. This result must be multiplied to the power of the deposit period. For example, if your deposit is for 10 years, t = 10. This whole result should be multiplied by the principal you invested. The result generated will equal the total accumulated value of your deposit. You can find out how much your deposit is worth currently after accumulating interest.

    Total Compound Interest Earned

    To find out how much interest was earned, you can use the following formula for Compound Interest.

    P[(1+ i/n))nt-1]

    Compound Interest Equation and Calculation

    To understand the compound interest equation further, we can break it down in simpler terms. If you decide to invest in a fixed deposit with compound interest, this is how you will earn interest every year.

    Period Deposit Balance
    Investment P
    Year 1 P + iP
    Year 2 (P+ iP) + i(P+iP)

    To collapse this formula, we can pull out factors of (1+i). Simply substitute iP with (1+i) to get the following:

    Period Deposit Balance
    Investment P
    Year 1 P(1+i)
    Year 2 P(1+i)2
    Year 3 P(1+i)3

    Formula for Annual Compound Interest

    To calculate the compound interest for a number of years together, we need to multiply P(1+i) to the power of the number of years of the deposit. So we end up with this formula:

    P (1+ i/n)n

    This formula can be used to calculate compound interest that is compounded annually. This means you receive interest only once a year. It is added to your principal, and you continue to earn interest on the new amount.

    Half-Yearly, Quarterly, Monthly Compound Interest Formula

    If you are earning interest multiple times in a year, you need to factor in this number into the equation. So the formula generated is:

    P (1+ i/n)nt

    This formula can also be used for instances where the interest is compounded once every two years. In this case, n = 0.5, as each year is calculated as half.

    Examples of Compound Interest

    For example, Rs. 10,000 is invested in a fixed deposit for 10 years. The interest is compounded every quarter which means 4 times in a year. The interest paid by the bank is 5%. To find out your nominal rate of interest, you need to divide 5 by 100 which equals 0.05. Now, we look at the formula and substitute the letters with the relevant numbers.

    Calculating the Total Value of the Deposit

    P (1+ i/n)nt

    Step 1: 10,000 (1+0.05/4)4x10

    Step 2: 10,000(1+0.0125)40

    Step 3: 10,000 (1.0125)40

    Step 4: 10,000 (1.64361946349)

    Step 5: 16436.1946349

    We can round of this total to Rs. 16,436.19. So the compound interest earned after 10 years is Rs. 6,436.19.

    Calculating the Interest Earned

    We can also arrive at this figure using the formula for compound interest earned. We can substitute the numbers for letters as seen below:

    P[(1+ i/n)nt -1]

    Step 1: 10,000 [(1+0.05/4)4x10 -1]

    Step 2: 10,000 [(1+0.0125)40-1]

    Step 3: 10,000 [(1.0125)40-1]

    Step 4: 10,000 [(1.64361946349) -1]

    Step 5: 10,000 (0.664361946349

    Step 5: 6436.1946349

    We can now add this interest earned to the principal amount to find out the value of the deposit. The maturity value will be Rs. 16,436.19.

    The earnings through compound interest can be demonstrated with the following graph.

    FD Compund Interest

    Simple Interest vs. Compound Interest

    To demonstrate the difference between simple interest and compound interest, let’s take for example two fixed deposits. Both deposits are of Rs. 10,000 for 10 years. The interest offered on Deposit 1 is 5% compound interest. The interest offered on Deposit 2 is 5% simple interest. The interest is calculated annually on both deposits.

    Period Deposit 1 - Compound Interest Deposit 2 - Simple Interest Difference
    Year 1 Rs. 500 Rs. 500 Rs. 0
    Year 2 Rs. 1,025.00 Rs. 1,000 Rs. 25
    Year 3 Rs. 1,576.25 Rs. 1,500 Rs. 76.25
    Year 4 Rs. 2,115.06 Rs. 2,000 Rs. 115.06
    Year 5 Rs. 2,762.82 Rs. 2,500 Rs. 762.82
    Year 6 Rs. 3,400.96 Rs. 3,000 Rs. 400.96
    Year 7 Rs. 4,071.00 Rs. 3,500 Rs. 571.00
    Year 8 Rs. 4,774.55 Rs. 4,000 Rs. 774.55
    Year 9 Rs. 5,513.28 Rs. 4,500 Rs. 1,013.28
    Year 10 Rs. 6,288.95 Rs. 5,000 Rs. 1,288.95
    FD Comparison

    From the graph above, we can see clearly the higher earnings through compound interest compared to simple interest. The difference is not too much upto the 4th year. This is because the interest accumulated over the years is added to the principal, thus making the principal significantly higher. From Year 5, there is a major difference in the interest earned. At the end of 10 years, Deposit 1 earns Rs. 6,288.95, while Deposit 2 earns Rs. 5,000. The difference between the two is Rs. 1,288.95.

    Compound Interest with Monthly Contributions

    Compounding interest on fixed deposits where you are allowed to make monthly contributions can get a little tricky. For the amount invested during the compounding period, interest will be generated for the initial investment amount + monthly contributions. These deposits are rare but are an extremely good investment with whopping returns.

    For example, Rs. 10,000 is the initial fixed deposit amount. The investor deposits Rs. 1,000 every month for 5 years. If the interest is compounded annually, then the interest will be as follows:

    Period Investment Breakdown Investment + Interest Accumulated Interest Earned Total Value of Deposit
    Year 1 10,000 + 12,000 22,000 1,100 23,100
    Year 2 10000 + (12000 x 2) + 1,100 35,100 1,755 36,855
    Year 3 10000 + (12000 x 3) + (1,100 +1,755) 48,855 2,442.75 51,297.75
    Year 4 10000 + (12000 x 4) + (1,100 +1,755 + 2,442.75 ) 63.297.75 3164.87 66,462.64
    Year 5 10000 + (12000 x 5) + (1,100 +1,755 + 2,442.75 + 3164.87 ) 78,461.75 3,923.13 82,385.77

    Through this table, we can see that the interest earned is accumulated every year and added to the principal amount. The total money contributed by the investor is Rs. 10,000 initially, followed by Rs. 1,000 every month or Rs. 12,000 every year. The investor made a total contribution of Rs. 10,000 + Rs. 60,000. At the end of 5 years, the value of his deposit is Rs. 82,385.77. The total compound interest earned is Rs. 12,385.77.

    The Benefit of Compound Interest

    Compound interest is your biggest friend when it comes to deposits and investments. Working in favor of investments, you stand to gain much more from the interest payable. But compound interest will be your worst enemy when it is calculated on your loan or other debt. You will end up paying significantly more interest on your loan. In terms of fixed deposits, compound interest is a great way of earning more on your investment. You earn much higher returns with compound interest on long term deposits. Compounding interest monthly, quarterly and half-yearly can spike your interest even higher. The benefits of compound interest can be listed as follows:

    • Reinvestment - The interest earned will be reinvested into the same deposit.
    • Higher value of the deposit - Compound interest leads to a higher value of the deposit. Upon maturity, your deposit will be more than a deposit with simple interest.
    • Long-term savings - Compound interest deposits encourage long-term savings as the return on investment is much higher after 10 years or more.
    • Increased Earnings - Options of compounding monthly, quarterly, and half-yearly increase the interest earned.

    Financial platforms where compound interest is applicable

    Compound interest is used for both debit and credit aspects of the financial world. Listed below are some of the investments and credit options that use compound interest.

    Investments

    • Savings Accounts
    • Fixed Deposits
    • Recurring Deposits
    • Other Certificates of Deposits
    • Reinvested Dividend Stocks
    • Retirement Funds

    Debt

    • Loans
    • Credit Cards
    • Mortgages

    When it is used in case of deposits and investments, we stand to benefit. On the other hand, when compound interest is charged on loans and debt, the banks and lenders stand to gain.

    News Related to Compound Interest Formula

    • SC/ST and OBC Students’ Education Loans To Be Guaranteed By Govt

      The Jharkhand government will be guaranteeing the education loans of students from SC/ST and OBC categories from the following academic year.

      Eligible students who apply for an education loan will be guaranteed by the government for a sum of over Rs.7.5 lakh, thus enabling them to pursue higher education. The guarantee will be provided under the Jharkhand Education Loan Guarantee Scheme, which can be accessed online.

      Courses at all state and central universities as well as NIT, AIIMS and IIT’s will be eligible for the education loans.

      27th March 2017

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