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Interest Income Calculator

How much you earn on your investments can signficantly impact the money you have in future. You simply can not compare returns from FD to MF to PPF. Because all of them follow different compounding priniciple.
First important pararmeter is ofcouse Interest rates. You may think 5% returns vs 6% returns is just differnce of 1% however over years this difference can become huge. So interest rate is also very important metric in your returns. This table shows how 1% difference can change your returns every year. (Assuming returns are quarterly compounding)
Impact of 1% difference in Interest rate on your investments over years
Difference in Returns after 1Y
Difference in Returns after 2Y
Difference in Returns after 5Y
Difference in Returns after 10Y
Difference in Returns after 20Y
10,000 100.38 201.76 512.06 1,050.33 2,210.98
50,000 501.88 1,008.79 2,560.28 5,251.65 11,054.90
1,00,000 1003 2017 5120 10503 22109
This table shows if you have started investing 1000 rupees every month, how much impact it can have basis the interest rate/returns you can generate over years.
Returns on 10000 rupee investment and compounding impact
After 5 Years
After 10 Years
After 20 Years
After 30 Years
After 50 Years
Investment 10k 10k 10k 10k 10k
5% Returns 12.8k 16.4k 27.0k 44.4k 1.2L
7.5% Returns 14.5k 21.0k 44.2k 92.9k 4.1L
10% Returns 16.4k 26.8k 72.1k 1.94L 13.9L
20% Returns 26.5k 70.4k 5.0L 34.9L 17.3Cr
Second importatnt parameter is Frequency of interest payment. If you getting returns which is quarterly compounding that means; every quarter interest paid on your deposits and it is added in your total deposit amount. So next quaarter; you earn additional inteerest rate on previously earned interet also thus increasing overall returns for you.

Banks generally pay intrest which is quarterly compounding however PPF generally pays interest which is annual compounding. For mutual funds, there are varrious options available for your choice.

If you are getting 6% returns with annual frequency compared to 6% returns with compounding frequency than both are different. Check how varying compounding frequency can change your returns.
Impact of 1000 rupees invested for 5 years at different compounding frequency
Interest Rate
Quarterly Compounding
Semi-Annual Compounding
Annual Compounding
Simple Interest Rate
  Amount after 5 years Effective annualised interest rate Amount after 5 years Effective annualised interest rate Amount after 5 years Effective annualised interest rate Amount after 5 years Effective annualised interest rate
5% 1282.04 5.09% 1280.08 5.06% 1276.28 5.00% 1250.00 4.56%
7% 1414.78 7.19% 1410.60 7.12% 1402.55 7.00% 1350.00 6.19%
10% 1638.62 10.38% 1628.89 10.25% 1610.51 10.00% 1500.00 8.45%
12% 1806.11 12.55% 1790.85 12.36% 1762.34 12.00% 1600.00 9.86%
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