1. What is the Compound Interest Formula?

The compound interest formula calculates how much your savings will grow over time when interest is earned on both the principal and accumulated interest. This is how HDFC savings accounts calculate interest.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

Where:

• \( P \) — Principal amount (initial investment in INR)
• \( R \) — Monthly interest rate (annual rate divided by 12, as decimal)
• \( N \) — Number of compounding periods (months)
• \( A \) — Final amount (INR)

Explanation: The formula accounts for interest being added to the principal each month, resulting in exponential growth of your savings.

3. Importance of Interest Calculation

Details: Understanding how compound interest works helps you make informed decisions about savings and investments, and shows the power of long-term saving.

4. Using the Calculator

Tips: Enter principal amount in INR, annual interest rate in percentage, and investment period in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How often does HDFC compound interest on savings accounts?
A: HDFC compounds interest on savings accounts quarterly (every 3 months).

Q2: What is the current interest rate for HDFC savings accounts?
A: Rates vary (check HDFC's website), typically 3-3.5% p.a. for regular savings accounts (as of 2023).

Q3: Is there a minimum balance requirement?
A: Yes, HDFC requires a minimum average quarterly balance (typically ₹5,000-₹10,000 depending on account type).

Q4: Are there tax implications on savings interest?
A: Interest above ₹10,000 per year is taxable under Income Tax Act Section 80TTA.

Q5: How can I maximize my savings interest?
A: Maintain higher balances (some tiers offer better rates), consider sweep-in FDs, or explore HDFC's premium savings accounts.