Interest Calculator — Calculations & Slabs for FY 2026-27

Simple interest is calculated solely on the original starting principal balance, so it grows by a fixed amount each period. Compound interest is calculated on the principal plus all interest earned from previous periods, meaning your money grows exponentially.

The more frequently interest compounds, the higher your final balance will be. For example, daily compounding adds interest to your balance every day, allowing that interest to earn interest in subsequent days. Annually compounded interest only calculates and adds interest once a year.

Simple interest is typically used for short-term personal loans, certain auto loans, certificates of deposit (CDs), and specific retail installment plans. Compound interest is used for most long-term investments, savings accounts, mortgages, and credit card balances.

Making monthly contributions at the start of the month gives your money an extra 30 days to compound compared to contributions made at the end of the month. Over a multi-year timeline, start-of-month contributions can result in thousands of dollars in extra return.

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