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Fixed Deposit Calculator
Calculate FD maturity with compounding.
Use Calculator →Simple Interest Calculator
Calculate simple interest earned on your principal amount over a period of time. Simple interest is calculated only on the principal amount.
Results
Interest Earned
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Maturity Amount
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Frequently Asked Questions
What is simple interest?
Simple interest is interest calculated only on the principal amount, not on accumulated interest. Formula: SI = (Principal × Rate × Time) / 100. It's straightforward but results in lower returns compared to compound interest.
How is simple interest different from compound interest?
Simple interest is calculated only on principal, while compound interest is calculated on principal plus accumulated interest. Over time, compound interest yields significantly higher returns due to the compounding effect.
Where is simple interest commonly used?
Simple interest is used in short-term personal loans, vehicle loans in some cases, and specific investment instruments. Most modern savings and investment products use compound interest.
What's the simple interest formula?
SI = (P × R × T) / 100, where P is principal, R is annual interest rate, and T is time in years. Maturity Amount = Principal + Simple Interest = P + (P × R × T) / 100.
Can I calculate simple interest for partial years?
Yes, time can be expressed as fractions. For 6 months, use T = 0.5. For 3 months, use T = 0.25. The formula works for any time period, not just complete years.
Is simple interest good for long-term investments?
No, simple interest is not ideal for long-term investments. The lack of compounding means returns grow linearly, not exponentially. For long-term wealth building, choose investments with compound interest.