Interest Calculator — Simple, Compound & NPA/Overdue (2026)
Calculate simple interest, compound interest, or overdue interest on an NPA account — pick the tab that matches what you need. Use Simple Interest for basic loan/deposit calculations, Compound Interest for fixed deposits and reducing-balance comparisons, and NPA/Overdue Interest for demand-notice or provisioning computations on an overdue balance.
- Simple Interest: SI = Principal × Rate × Time ÷ 100
- Compound Interest: CI = Principal × (1 + Rate/n)ⁿᵗ − Principal, n = compounding frequency per year
- NPA/Overdue Interest: Outstanding × Rate × Days ÷ 36,500 (365-day year, daily simple interest)
- IRAC norm: interest on an NPA account is income only when actually received — not on accrual
| Principal | — |
| Simple Interest | — |
| Maturity Value (Principal + Interest) | — |
| Principal | — |
| Compound Interest | — |
| Maturity Value (Principal + Interest) | — |
| Effective Annual Rate (for comparing schemes) | — |
| Outstanding Balance | — |
| Overdue Interest | — |
| Total Amount Due (Balance + Interest) | — |
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Simple Interest vs Compound Interest
Simple interest is calculated only on the original principal, so it grows in a straight line — ₹1,00,000 at 7% for 3 years earns exactly ₹21,000, whatever the tenure split. Compound interest is calculated on the principal plus previously earned interest, so it compounds — the more frequently interest is added back (annually, quarterly, monthly, even daily), the faster it grows. The same ₹1,00,000 at 7% for 3 years, compounded quarterly, earns ₹23,143.93 — ₹2,143.93 more than simple interest for an identical rate and tenure, purely from compounding.
This is why two fixed deposits quoted at the “same” 7% rate can mature to different amounts — one compounding quarterly and another annually will not pay out the same amount. The Effective Annual Rate shown in the Compound Interest tab converts any compounding frequency into a single comparable annual yield, which is the number to actually compare across deposit schemes.
NPA / Overdue Interest — and Why It Isn’t Automatically Income
Overdue interest on an NPA account is still calculated — typically as daily simple interest on the outstanding balance — for demand notices, recovery proceedings, and provisioning purposes. On an outstanding balance of ₹5,00,000 at 12% for 90 days overdue, that works out to ₹14,794.52 in interest, taking the total amount due to ₹5,14,794.52.
But under RBI’s Income Recognition and Asset Classification (IRAC) norms, once an account is classified as a Non-Performing Asset, the bank cannot recognise this accrued interest as income the way it would on a performing account. Interest income on an NPA is booked only on a cash (realisation) basis — when the borrower actually pays — and any interest that was already accrued and taken to income before the account turned NPA must be reversed. This is a frequently tested distinction: the interest amount is still computed and demanded from the borrower, but it does not flow into the bank’s profit and loss account until it is actually received.
Frequently Asked Questions — Interest Calculator
What is the formula for simple interest?
Simple Interest = Principal × Rate × Time ÷ 100, where Time is expressed in years. Unlike compound interest, simple interest is always calculated on the original principal only — it does not add earned interest back into the base for future calculations.
What is the formula for compound interest?
Compound Interest = Principal × (1 + Rate ÷ (100 × n))^(n × Time) − Principal, where n is the number of times interest is compounded per year (1 for annually, 4 for quarterly, 12 for monthly, and so on). The more frequently interest compounds, the higher the final maturity value for the same nominal rate.
Why do two fixed deposits at the same interest rate mature to different amounts?
Because compounding frequency matters, not just the quoted rate. A deposit compounding quarterly earns more than one compounding annually at the identical nominal rate, since interest is added back to the principal more often. The Effective Annual Rate converts any compounding frequency into one comparable annual figure, which is what should actually be compared across schemes.
How is overdue interest calculated on an NPA account?
Overdue interest on an NPA account is typically calculated as daily simple interest on the outstanding balance: Outstanding Balance × Rate × Number of Days ÷ 36,500 (using a 365-day year). This figure is used for demand notices, recovery calculations, and provisioning — it represents the amount owed, not income already booked.
Is overdue interest on an NPA account recognised as income immediately?
No. Under RBI’s Income Recognition and Asset Classification (IRAC) norms, interest on a Non-Performing Asset is recognised as income only when it is actually received in cash, not on an accrual basis. Any interest that was already accrued and credited to income before the account was classified NPA must be reversed. The interest is still calculated and demanded from the borrower — it simply cannot be booked as bank income until realised.