Are you looking for the best FD interest rates in 2026? Investing ₹1,00,000 in a Fixed Deposit for 5 Years is a secure way to grow your savings with guaranteed returns. For a ₹1,00,000 deposit for 5 Years, our calculator shows you exactly how much interest you will earn over your chosen tenure. Comparing FD rates with SBI, HDFC, and ICICI helps you maximize your yield. Fixed Deposits are protected by DICGC insurance up to ₹5 Lakh, making them an essential part of a conservative Indian portfolio in 2026.
Market Intelligence
"Liquidity and compound interest are your best friends. Use this engine to find the 'Sweet Spot' between risk-free returns and capital growth."
— Mahavir Hirani, Lead Analyst
How is Compound Interest Calculated? (The Formula)
The mathematical formula for compound interest is slightly more complex than simple interest because it accounts for the number of times interest is applied per year:
Daily vs Monthly vs Quarterly Compounding
The frequency of compounding (represented by 'n' in the formula) fundamentally changes your returns. The more frequently interest is added back to your principal, the faster your money grows.
- Annual Compounding (n=1): Interest is added once a year. Standard for many traditional bonds.
- Quarterly Compounding (n=4): Interest is added every 3 months. Most Indian Fixed Deposits (FDs) use this.
- Monthly Compounding (n=12): Interest is added every month. Most RDs and Mutual Fund projections follow this.
- Daily Compounding (n=365): Interest is added every single day. This is how most credit card interest and high-yield savings accounts work.
The Power of Compounding: Logic Audit
If you invest ₹50L at 9%% p.a. for {YEARS} years:
- With Simple Interest, you would have a linear gain.
- With Annual Compounding, you would have a significant snowball effect.
- With Monthly Compounding, you reach the mathematical maximum for standard retail products.
- The 'gap' between simple and monthly compound interest is the literal cost of not reinvesting your earnings.
How to Use this Calculator
1
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Input your primary financial figures into the provided fields.
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Frequently Asked Questions
What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long it takes for your money to double with compound interest. Simply divide 72 by your annual interest rate. For example, at 12%, your money doubles in 6 years.
Does the SIP calculator use compound interest?
Yes, SIP (Systematic Investment Plan) is a form of compound interest where you add new principal every month. It uses the 'Future Value of Annuity' formula, which is an extension of the basic compound interest formula.
Which Indian investments offer the best compounding?
Equity Mutual Funds, PPF (compounded annually but calculated monthly), and VPF typically offer the best long-term compounding benefits in India due to higher interest rates and longer tenures.
Is compound interest taxable in India?
Taxation depends on the asset. Fixed Deposit interest is taxed annually as 'Income from Other Sources', which can 'leak' the compounding effect. Equity investments are only taxed upon withdrawal (LTCG), allowing the interest to compound tax-free for years.
Why is daily compounding rare for savings?
Daily compounding is administratively heavy for banks. However, many fintech apps and modern savings accounts have started offering daily or even real-time interest credits to attract users.
Is Post Office FD interest taxable?
Yes, interest earned on Post Office Time Deposits is taxable according to your income tax slab. However, the 5-year deposit is eligible for deductions under Section 80C.
⚠️ Disclaimer
Calculations are for educational purposes. Consult a financial advisor before investing.