1. What is Monthly Interest Calculation?

The monthly interest calculation determines how much interest your fixed deposit or savings account will earn each month at HDFC Bank. It's based on your principal amount and the applicable interest rate.

2. How Does the Calculator Work?

The calculator uses the simple interest formula:

Where:

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

Explanation: The annual interest rate is divided by 12 to get the monthly rate, then multiplied by the principal amount to calculate monthly interest.

3. Importance of Interest Calculation

Details: Understanding monthly interest helps in financial planning, comparing investment options, and estimating returns from fixed deposits or savings accounts.

4. Using the Calculator

Tips: Enter principal amount in INR and annual interest rate in percentage. All values must be valid (principal > 0, rate between 0-100%).

5. Frequently Asked Questions (FAQ)

Q1: Is this calculation for fixed deposits or savings accounts?
A: This simple calculation applies to both, though actual bank calculations may use daily compounding for savings accounts.

Q2: How often is interest credited in HDFC accounts?
A: Savings accounts typically credit interest quarterly, while fixed deposits can be monthly, quarterly, or at maturity depending on option chosen.

Q3: Are there taxes on the interest earned?
A: Yes, interest income is taxable as per your income tax slab. TDS may be deducted for fixed deposits if interest exceeds ₹40,000 (₹50,000 for senior citizens).

Q4: Does HDFC offer different rates for different tenures?
A: Yes, fixed deposit rates vary by tenure (7 days to 10 years) and customer type (general public, senior citizens, etc.).

Q5: How can I get higher interest rates?
A: Consider longer tenures, senior citizen accounts (if eligible), or special deposit schemes that HDFC may offer periodically.