Compound growth formula with initial deposit P, periodic deposit PMT, annual interest rate r, compounding frequency n, and time t in years.
📐 Step-by-Step Calculation Breakdown
Substituted values from your current calculation inputs:
Initial Savings Balance: ₹100000
Monthly Contribution: ₹5000
Annual Interest Rate (%): 4 %
Compounding Frequency: quarterly
Investment Period (Years): 5 years
How to Use This Calculator
Enter initial savings balance in Rupees (₹).
Enter optional monthly recurring deposit amount.
Enter annual interest rate offered by your bank (typically 3.0% to 7.0% in India).
Select compounding frequency (Quarterly is standard for Indian banks).
Select savings period in years and click Calculate.
Example Calculation
Starting with ₹1,00,000 and depositing ₹5,000/month at 4.0% interest compounded quarterly for 5 years yields a final balance of ~₹4,44,057 with ₹44,057 total interest earned.
Understanding the Results
Indian banks calculate savings interest on a daily product basis and credit it quarterly. Under Section 80TTA, interest up to ₹10,000 per year is tax-free for individuals.
Savings Interest Calculator — How Savings Account Interest Works
Idle money sitting in savings bank accounts loses real purchasing power every year unless you actively track compound interest yield. In India, commercial banks calculate interest on a daily product basis and credit it to your balance on a quarterly compounding cycle.
Indian Bank Savings Interest Rates (Illustrative)
Bank Tier
Representative Banks
Rate Range
Compounding
Large Public Sector
SBI, PNB, Bank of Baroda
2.70% – 3.00%
Quarterly
Major Private Sector
HDFC, ICICI, Axis Bank
3.00% – 3.50%
Quarterly
Small Finance Banks
AU, Equitas, Ujjivan
5.00% – 7.25%
Monthly / Quarterly
Post Office
India Post (DoP)
4.00%
Annual Credit
Rates shown are illustrative general ranges. Always check current rates directly with your bank.
Tax on Savings Interest: Section 80TTA vs 80TTB
Section 80TTA (Individuals under 60 & HUFs): Deduction up to ₹10,000/year on savings account interest from banks, cooperative banks, and post offices.
Section 80TTB (Senior Citizens 60+): Enhanced deduction up to ₹50,000/year covering savings accounts, FDs, and RDs.
Financial Disclaimer: Financial Disclaimer: Calculation results and projections are provided for educational and illustrative purposes only and do not constitute financial, investment, lending, or tax advice. Actual borrowing terms, interest rates, and loan charges are determined by lenders and underwriting policies.
Frequently Asked Questions
How is savings account interest calculated in Indian banks?
In India, RBI mandates that banks calculate interest on a daily end-of-day product balance basis and credit the interest to accounts quarterly.
Is savings account interest taxable in India?
Interest up to ₹10,000 earned in savings accounts across all banks and post offices is tax-deductible under Section 80TTA. For senior citizens (age 60+), Section 80TTB provides deduction up to ₹50,000 on all bank deposit interest.
Which banks offer the highest savings interest in India?
Small Finance Banks (like AU Small Finance Bank, Equitas) often offer 5% to 7% on savings accounts, while large public and private sector banks (SBI, HDFC, ICICI) typically offer 2.7% to 3.5%.
📈Investing, Wealth & Compounding Growth Cluster
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