Compound Interest
Banking & savings term
Compound interest is interest calculated on both the original principal and the interest already added — so the balance grows faster over time.
The more often it compounds (yearly, quarterly, monthly), the more you earn. ₹1 lakh at 8% compounded monthly for 10 years grows to about ₹2.22 lakh, versus ₹1.8 lakh with simple interest.
More banking & savings terms
Fixed DepositAn FD is a deposit that locks a lump sum with a bank for a fixed term at a fixed interest rate, paying more than a savings account.Recurring DepositAn RD lets you deposit a fixed amount every month for a set term at a fixed interest rate — a disciplined way to save without a lump sum.PPFPPF is a 15-year government savings scheme with tax-free interest, a deduction under 80C, and complete capital safety.EPFEPF is a retirement savings scheme for salaried employees, where you and your employer each contribute 12% of basic pay every month.NPSNPS is a market-linked retirement scheme where you invest until age 60, then take part as a lump sum and use the rest to buy a pension (annuity).Repo RateThe repo rate is the interest rate at which the RBI lends to commercial banks — the benchmark that drives loan and deposit rates across the economy.