What is Simple Interest?
Simple interest is calculated only on the original principal amount for the entire duration of the loan or deposit — it never earns "interest on interest." It grows linearly rather than exponentially.
Simple interest is used in a handful of specific Indian savings instruments, notably the Senior Citizens Savings Scheme (SCSS), where interest is paid out quarterly rather than compounded and reinvested.
Formula
SI = (P × R × T) ÷ 100