GET A CALL BACK

Want us to help you with anything?
Request a Call back

This field is required Only alphabetes are allowed
This field is required Only alphabetes are allowed
Please enter valid number
Please enter valid email
Please select product type
Please enter valid pincode

Thank you for your request.

Your reference number is CRM

Our executive will contact you shortly

THE
ORANGE
HUB

Blog
2 mins Read | 1 Year Ago

Calculate Interest on Overdraft Against Fixed Deposit

Calculate Interest on Overdraft Against Fixed Deposit

 

Before opening a Fixed Deposit (FD) account or taking an overdraft against an existing FD, it's essential to calculate the potential returns and interest earnings.

To calculate the interest on your Fixed Deposit, you need to multiply the principal amount (say Rs. 5,00,000) by the interest rate (let’s take 6%) and then divide the result by 100. Following this formula and figures, the interest on your Fixed Deposit amounts to Rs. 30,000.

For the overdraft facility, you can only avail up to 90% of the principal amount - Rs. 4,50,000 in this case.

The interest rate is determined by adding the base interest rate (6%) with the spread (2%). This calculation results in an overdraft interest rate of 8%.

To determine the interest payable on a selected amount utilised from the overdraft ( say you need Rs.1,00,000), you multiply the overdraft amount by the overdraft interest rate and divide the result by 100. Thus, the interest payable on the amount (of Rs.1,00,000) used from the overdraft comes to Rs. 8,000.

Consequently, when utilising Rs. 1,00,000 from the overdraft facility against your Fixed Deposit, the interest payable would amount to Rs. 8,000.

For overdraft against FD, a calculator can help carry out the calculations easily. You can also understand the interest earned on your FD and the interest payable. Remember that calculators will only give you the numbers without factoring in for other provisions and circumstances, the actual returns and interest earnings may vary accordingly.

Please note that Credit facilities are not available for Non-callable Deposits (Non-Withdrawable).

T&C Apply

People who read this also read

View All

Recommended

View All
Blog
2 mins Read | 1 Year Ago
5 Reasons Corporate FDs are a Safe Investment
Corporate Fixed Deposits

Scroll to top

arrow