1. What is the Interest Calculation Formula?

The simple interest formula calculates monthly interest for HDFC savings accounts using principal balance and monthly interest rate (annual rate divided by 12).

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

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

Explanation: The formula multiplies your account balance by the monthly interest rate (annual rate divided by 12 months, converted to decimal).

3. Importance of Interest Calculation

Details: Understanding how interest is calculated helps you estimate earnings from your savings and compare different account options.

4. Using the Calculator

Tips: Enter your current account balance in INR and the annual interest rate percentage. The calculator will show your estimated monthly interest.

5. Frequently Asked Questions (FAQ)

Q1: What is the current HDFC savings account interest rate?
A: Rates vary (typically 3-4% p.a. for regular savings, higher for premium accounts). Check HDFC's latest rates before calculating.

Q2: Is interest calculated daily or monthly?
A: HDFC calculates interest on daily balances but credits it quarterly to your account.

Q3: Are there any tax implications?
A: Interest above ₹10,000 per year is taxable under Income Tax Act Section 80TTA.

Q4: Does this calculator account for compounding?
A: No, this shows simple monthly interest. Actual earnings may be slightly higher due to quarterly compounding.

Q5: How can I increase my savings interest?
A: Consider HDFC's premium accounts (like SavingsMax) or fixed deposits for higher rates.