The amount you deposit or invest at the start.
Your own input — check the actual rate offered.
How long the money stays invested.
Quick examples
₹1,00,000 at 2.7% a year, compounded quarterly, for 3 years.
What each result means
Principal
What it is: The amount you put in.
Your value: ₹1,00,000
Your own money.
Interest earned
What it is: Maturity value minus principal.
Your value: ₹8,408
Growth at your assumed rate.
Maturity value
What it is: Principal plus interest at the end.
Your value: ₹1,08,408
The headline figure.
Effective annual yield
What it is: The yearly rate once compounding is included: (1 + r/m)ᵐ − 1.
Your value: 2.727%
Higher than the quoted rate when compounding is more frequent.
Year-by-year breakdown
| Year | Opening balance (₹) | Interest this year (₹) | Total interest (₹) | Balance at year end (₹) |
|---|---|---|---|---|
| 1 | ₹1,00,000 | ₹2,727 | ₹2,727 | ₹1,02,727 |
| 2 | ₹1,02,727 | ₹2,802 | ₹5,529 | ₹1,05,529 |
| 3 | ₹1,05,529 | ₹2,878 | ₹8,408 | ₹1,08,408 |
How to read this: each row is one year. Interest is added to the balance, so each year earns a little more than the last. The highlighted row is your final year.
What this calculator does
Banks calculate savings account interest on the daily balance and credit it at least quarterly, as RBI requires. This calculator assumes the balance stays the same and interest is credited quarterly.
What your result means
The maturity value follows directly from your principal, rate, compounding frequency and duration. It is what the numbers show under these assumptions, not a promised outcome.
Formula
1. Compound interest
Symbols
- A
- Maturity value (₹)
- P
- Principal (₹)
- r
- Annual rate (decimal)
- m
- Compounding periods per year
- t
- Years
Why this formula works
Each period adds interest at r ÷ m on the balance so far, so the balance multiplies by (1 + r ÷ m) m × t times.
Unit check
₹ = ₹ × (pure ratio). ✓
Worked example
P = ₹1,00,000, 7%, quarterly (m = 4), 5 years: A = 1,00,000 × 1.0175²⁰ ≈ ₹1,41,478.
Common mistakes
Using the annual rate per period. Forgetting to multiply years by the compounding frequency. Confusing simple and compound interest.
Working for your numbers
- Rate per period = 2.7% ÷ 4 = 0.6750%
- Periods = 4 × 3 = 12
- Growth factor = (1 + 0.006750)^12 = 1.084076
- A = ₹1,00,000 × 1.084076 = ₹1,08,408
- Interest = ₹1,08,408 − ₹1,00,000 = ₹8,408
Frequently asked questions
Is savings interest taxable?
Yes, it is added to your income. Section 80TTA/80TTB deductions may apply under the old regime; check the current rules.
Is the rate on this page guaranteed?
No. The rate is your own input. Banks and markets set actual rates, and they can change. This page shows what the numbers give under your assumptions.
When should I talk to a professional instead?
Before a real borrowing or investment decision, check the lender's Key Facts Statement or speak to a qualified adviser. This page is educational and does not consider your full situation.
Symbols and assumptions
- P
- Principal (₹)
- r
- Annual rate (%)
- m
- Compounding frequency
- t
- Duration (years)
- The rate stays the same for the whole duration.
- Interest is reinvested, not paid out.
- Does not account for income tax, TDS, fees or inflation.
- Figures are in Indian Rupees (₹).
Sources and review
Reviewed 2026-09-29 · Next review 2027-09-29
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How it works
Calculates interest earned on daily balance, usually credited quarterly.
The formula
Interest = Principal × Rate × Time- r
- 3-4% usually
Worked example
Maintaining ₹2 Lakh average balance at 3.5%.
Pro tips
- Interest up to ₹10,000 is tax-free under 80TTA.
- Keep emergency funds in high-interest savings.
Common mistakes
- Keeping too much idle cash in low-yield savings.
Go deeper
Related lessons
Concepts to explore
Related guides
Institutional grade calculations are illustrative and for educational wealth architecture. Results do not constitute investment advice.