See exactly how much interest your money will earn
Enter your principal, interest rate, and time period above — the simple interest calculator instantly shows you the total interest earned and the final maturity value in rupees. No guesswork, no spreadsheet needed.
This is especially handy for fixed deposits, personal loans, recurring deposits, or any scheme where interest is calculated only on the original amount — not on the interest that builds up over time.
How to use this simple interest calculator
- Principal (₹): Type the amount you are depositing or lending — for example, ₹1,00,000.
- Annual Interest Rate (%): Enter the rate the bank or scheme offers — say, 7.5% per year.
- Time Period: Enter the duration in years (or months if the tool allows). For a 2-year FD, type 2.
- Read the results: You will instantly see the Simple Interest (SI) earned and the Total Amount (Principal + SI) you get back at maturity.
Worked example — ₹2 lakh FD at 7% for 3 years
Suppose you put ₹2,00,000 in a post office time deposit at 7% per annum for 3 years.
- Simple Interest = ₹2,00,000 × 7 × 3 ÷ 100 = ₹42,000
- Maturity Value = ₹2,00,000 + ₹42,000 = ₹2,42,000
So you walk away with ₹42,000 extra on top of your original deposit — all in three years, without doing any math yourself.
How simple interest is calculated — formula and snippet
Simple interest (SI) is charged only on the original principal, never on the interest that has already been earned. That is what makes it predictable and easy to plan around.
The formula is:
SI = P × R × T / 100
where:
P = Principal amount (₹)
R = Annual interest rate (%)
T = Time in years
Maturity Amount = P + SIQuick contrast with compound interest: In compound interest, the interest earned each period is added back to the principal, so the next period's interest is higher. Simple interest never does this — it is always calculated on the original P only.
A small comparison table helps show the difference over time:
| Scenario | Principal | Rate | Period | SI Earned | Maturity Value |
|---|---|---|---|---|---|
| Short-term loan / scheme | ₹50,000 | 8% | 1 year | ₹4,000 | ₹54,000 |
| Post office TD | ₹1,00,000 | 7.5% | 2 years | ₹15,000 | ₹1,15,000 |
| Personal loan (check) | ₹5,00,000 | 12% | 3 years | ₹1,80,000 | ₹6,80,000 |
Rates and rules to know for FY 2025-26
These points are relevant whether you are checking an FD rate, a government scheme, or a loan offer:
- Post Office Time Deposit (1 year): 6.9% p.a. for Q1 FY 2025-26 — announced quarterly by the Ministry of Finance. Interest here is calculated on a simple interest basis for some tenures.
- Bank FD rates vary by lender and tenure — currently ranging roughly 6.5%–8.05% for regular citizens. Senior citizens typically get 0.25%–0.50% extra.
- Tax on interest: Interest earned on FDs and most deposits is fully taxable as Income from Other Sources under the Income Tax Act. If your total bank interest in a year crosses ₹40,000 (₹50,000 for senior citizens), the bank will deduct TDS at 10%. You can submit Form 15G / 15H if your total income is below the basic exemption limit to avoid this deduction.
- Simple interest vs EMI loans: Many personal loans and gold loans quote a flat/simple interest rate. Always check whether the rate is flat or reducing-balance — the effective cost on a reducing-balance loan is roughly half of an equivalent flat rate.
- For official small savings scheme rates, see the Ministry of Finance (finmin.nic.in) or the India Post website.
Practical tips before you use the number
- Check whether your FD is simple or compound: Most bank FDs actually compound quarterly — use a compound interest calculator for those. Simple interest applies mainly to short-term schemes (under 6 months) and some post office deposits.
- Loan trap: When a lender quotes a "flat 10% per year" on a loan, the actual annual percentage rate (APR) you pay is close to 18-19% because you are paying interest on the full principal even as you repay it in EMIs. Always ask: "Is this flat rate or reducing balance?"
- Maturity value ≠ in-hand amount: Remember, TDS may be deducted before you receive the money. Factor that in when comparing schemes.
- These results are indicative. Actual returns depend on the exact scheme terms, any processing fees, and your applicable tax slab. Speak to your bank or a SEBI-registered adviser for personalised advice.
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Ready to try it? Scroll up, enter your figures, and get your interest and maturity value in seconds.