1. What is HDFC Bank Savings Account Interest Calculation?

The HDFC Bank savings account interest calculation determines the monthly interest earned based on your average balance and the annual interest rate. Interest is calculated on the daily closing balance and credited to your account quarterly.

2. How Does the Calculator Work?

The calculator uses the interest formula:

Where:

• \( Average\ Balance \) — Monthly average balance (INR)
• \( r \) — Annual interest rate (%)

Explanation: The formula calculates the monthly interest by converting the annual rate to a monthly rate and applying it to the average balance.

3. Importance of Interest Calculation

Details: Understanding how interest is calculated helps you maximize your savings returns and compare different banking products effectively.

4. Using the Calculator

Tips: Enter your monthly average balance in INR and the annual interest rate in percentage. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How often is interest credited to HDFC savings accounts?
A: Interest is typically credited quarterly on HDFC savings accounts.

Q2: Is the interest rate fixed or variable?
A: Savings account interest rates are usually variable and subject to change based on RBI policies and bank decisions.

Q3: Are there different interest rates for different balance tiers?
A: Yes, HDFC Bank often offers tiered interest rates where higher balances may earn higher interest rates.

Q4: Is the interest earned taxable?
A: Yes, interest earned on savings accounts is taxable under the Income Tax Act, 1961, though you can claim deduction under Section 80TTA.

Q5: How is average balance calculated?
A: Average balance is typically calculated as the sum of all daily closing balances divided by the number of days in the period.