1. What is the HDFC Savings Interest Calculation?

The HDFC savings account interest is calculated monthly using the simple interest formula based on your principal balance and the applicable interest rate.

2. How Does the Calculator Work?

The calculator uses the simple interest formula:

Where:

• \( P \) — Principal balance (INR)
• \( R \) — Monthly interest rate (annual rate / 12, as a decimal)
• \( I \) — Monthly interest earned (INR)

Explanation: The interest is calculated by multiplying the principal balance by the monthly interest rate (annual rate divided by 12 and converted to decimal form).

3. Importance of Interest Calculation

Details: Understanding how interest is calculated helps you estimate your earnings and compare different savings options to maximize your returns.

4. Using the Calculator

Tips: Enter your principal balance in INR and the annual interest rate in percentage. The calculator will compute the monthly interest you can expect to earn.

5. Frequently Asked Questions (FAQ)

Q1: How often is interest credited in HDFC savings accounts?
A: Interest is calculated on daily balances and credited quarterly to your account.

Q2: Is the interest taxable?
A: Yes, interest earned is taxable under Income Tax Act, 1961. TDS may apply if interest exceeds ₹10,000 in a financial year.

Q3: What is the current HDFC savings account interest rate?
A: Rates vary (typically 3.0-3.5% p.a. for regular savings, higher for premium accounts). Check HDFC's latest rates before calculating.

Q4: Does this calculator account for compounding?
A: No, this shows simple monthly interest. Actual quarterly compounding would yield slightly higher returns.

Q5: Are there any minimum balance requirements?
A: Yes, HDFC requires minimum average quarterly balances (typically ₹2,500-₹10,000 depending on account type).