Compound interest is the interest that you earn on interest. In other words, the money you invest earns some interest, and that interest is again reinvested, so it also goes on to earn more interest. 

For example, say you have invested Rs. 1,000 in a plan that offers 5% compound interest annually. At the end of the first year, your money would have grown to Rs. 1,050 due to an interest of Rs. 50 (Rs. 1,000 x 5%).

Then, at the end of the second year, your money would have grown to Rs. 1,102.50 due to an interest of Rs. 52.50 (Rs. 1,050 x 5%). In other words, you have earned interest upon your interest, which is essentially what compound interest is.

The power of compounding calculator is a free online tool that can help you understand how your money will likely grow, given certain set parameters like the tenure of investment, and the rate of interest or growth. You can make use of this free online tool to get more insights into how much you need to save, and for how long, in order to let your money grow up to the level you want it to.

You can use the power of compounding calculator from Tata AIA Life Insurance free of charge. Simply enter the necessary details, such as the amount you would like to invest, the frequency at which you would prefer to invest it, the investment tenure, the assumed rate of interest, and the period for which you would like to stay invested. Once you have entered these details, the calculator shows you how much your corpus would grow to be. 

To maximize the effect of the power of compounding, you can follow some practical ideas such as:

• Start investing as early in life as possible 

• Invest wisely, and choose products that offer higher rates of returns

• Continue to invest regularly and consistently