Variable Rate Compound Interest Calculator
When the rate does not hold for the whole term.
Year by year10 yrs
| Year | Rate | Opening | Added | Interest | Closing |
|---|---|---|---|---|---|
| 1 | 8.00% | ₹5,00,000.00 | ₹0.00 | ₹41,499.75 | ₹5,41,499.75 |
| 2 | 8.00% | ₹5,41,499.75 | ₹0.00 | ₹44,944.21 | ₹5,86,443.97 |
| 3 | 8.00% | ₹5,86,443.97 | ₹0.00 | ₹48,674.56 | ₹6,35,118.53 |
| 4 | 8.00% | ₹6,35,118.53 | ₹0.00 | ₹52,714.52 | ₹6,87,833.05 |
| 5 | 8.00% | ₹6,87,833.05 | ₹0.00 | ₹57,089.80 | ₹7,44,922.85 |
| 6 | 6.50% | ₹7,44,922.85 | ₹0.00 | ₹49,888.86 | ₹7,94,811.72 |
| 7 | 6.50% | ₹7,94,811.72 | ₹0.00 | ₹53,230.01 | ₹8,48,041.73 |
| 8 | 6.50% | ₹8,48,041.73 | ₹0.00 | ₹56,794.93 | ₹9,04,836.66 |
| 9 | 6.50% | ₹9,04,836.66 | ₹0.00 | ₹60,598.59 | ₹9,65,435.24 |
| 10 | 6.50% | ₹9,65,435.24 | ₹0.00 | ₹64,656.99 | ₹10,30,092.23 |
A single assumed rate held for twenty years is a convenient fiction. Deposit ladders reprice on renewal, small savings rates are notified quarterly, and most people expect returns to fall as they shift toward safer assets nearer a goal. Each period here compounds monthly at its own rate, starting from where the previous one left off, so the order matters: the same rates in the opposite sequence produce a different answer whenever money is being added along the way, because the later rate acts on a much larger balance. The effective flat rate is shown only when nothing is added each month — once contributions arrive at different times there is no single rate that honestly describes the run.
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Independent · No commissions · No fund-house data — how the numbers are computed
How it works
The standard compound interest calculator assumes one rate holds for the whole term. This one does not. Enter a starting amount, an optional monthly addition, and a series of periods each with their own number of years and their own rate, and it compounds through them in order and shows the balance year by year.
The defaults are ₹5,00,000 growing for five years at 8% and then five more at 6.5%, with nothing added monthly. That is the shape of a deposit ladder repricing on renewal, or of an expectation that rates fall over time. Up to six periods can be added.
Order matters whenever money is being added along the way. The same set of rates applied in the opposite sequence gives a different answer, because a later rate acts on a much larger balance than an earlier one does. Running a plan both ways is a quick way to see how much of a projection depends on the rate arriving early rather than late.
The effective flat rate is shown only when nothing is added each month. Once contributions land at different times there is no single rate that honestly summarises the run, and reporting one would invite exactly the false comparison the calculator exists to avoid.
For each period: balance = (balance + monthly addition) x (1 + rate / 1200), repeated once per month, carried into the next periodEach period compounds monthly at its own rate, starting from the balance the previous period ended with. The addition lands before that month's growth, the same annuity-due convention the SIP calculators use.
Frequently asked questions
How do you calculate compound interest when the rate changes?
You compound each stretch of time at its own rate and carry the closing balance into the next stretch as the opening balance. There is no single formula for the whole term; the calculation is sequential. This is why a ten-year projection at one blended rate and the same ten years split into two five-year rates give different answers whenever money is being added along the way.
Does the order of the interest rates matter?
Not for a lump sum left untouched, because multiplication is commutative and the same factors are applied either way. It matters a great deal once money is being added over time, since a rate that arrives later applies to a much larger balance. A plan that depends on high returns arriving in its final years is very different from one that gets them early.
When would interest rates change part way through an investment?
Frequently. Fixed deposits reprice at whatever rate prevails when each one is renewed, so a deposit ladder is a sequence of different rates rather than one. Small savings scheme rates are notified quarterly by the Ministry of Finance. And most goal-based plans deliberately shift toward safer, lower-returning assets as the goal date approaches, which is a planned rate change rather than a market one.
Why is no effective annual rate shown when I add money monthly?
Because no single rate describes the result honestly. Each contribution is exposed to a different mix of the periods depending on when it arrived, so the return earned by the money as a whole is money-weighted rather than time-weighted. Quoting one number would invite comparison against a flat rate that means something different. For a return figure across irregular contributions, an XIRR calculation is the right tool.
Go further
The single-rate version, when one assumption covers the whole term.
One rung of the ladder, at the rate quoted today.
The right way to get a single return figure across irregular contributions.
Why the last years of any of these periods carry the most weight.
The rate working against every one of these periods.