Overdraft Interest Calculator (India)
Free bank overdraft interest calculator for Indian rupees (INR). Estimate daily OD interest and total charges when your current account, cash credit, or dropline overdraft runs in debit. Enter the utilised average or peak overdrawn balance, your annual interest rate (p.a.), and the number of days in the billing or interest window you want to model.
Total interest (this period)
₹986
Interest per day
₹32.88
Effective daily rate (of principal)
0.0658%
Days charged
30
Interest cost vs overdrawn balance
Interest is estimated as: overdrawn × (annual rate ÷ 365) per day, × number of days. Your bank may use 360 days, calendar months, or include additional fees—check your sanction letter.
What is a bank overdraft?
An overdraft is a pre-approved credit limit linked to a current account (and in some products, a savings account) that allows withdrawals, cheques, or UPI debits beyond cleared funds, up to the sanctioned cap. For retail and MSME borrowers in India, overdraft-style limits also appear as cash credit (CC) or running-account facilities where interest accrues on the daily outstanding debit, not on an unused portion of the line.
How overdraft interest is calculated
Many banks express overdraft pricing as an annual rate (p.a.). A common simplified approach—used by this OD interest calculator—is to treat each day's interest as: overdrawn balance × (annual rate ÷ 365). Interest for your chosen window is that daily amount multiplied by the number of days you select (for example a 30-day statement cycle). If you hold ₹50,000 overdrawn at 24% p.a., indicative daily interest is roughly ₹50,000 × (24% ÷ 365).
Real bank statements may apply tiered rates, minimum interest, or a 360-day divisor; always confirm against your sanction letter and schedule of charges.
Example (illustrative)
- Overdrawn amount: ₹50,000
- Annual rate: 24%
- Daily rate ≈ 24% ÷ 365 ≈ 0.0658% per day on principal
- Indicative daily interest ≈ ₹32.88
- Over 30 days: ≈ ₹986 (before fees, GST, or bank-specific rules)
Common overdraft-style products in India
- Current account overdraft: linked to business or professional current accounts; interest and renewal charges depend on the bank's commercial lending grid.
- Cash credit / running account: revolving working-capital limits where average or daily balances drive interest—terminology differs from "overdraft" but the daily interest idea is similar for planning.
- Salary overdraft or short-term OD: smaller limits with declared income; rates may differ from unsecured personal loans once you breach the free period or limit.
Overdraft vs term loan vs credit card
A term loan disburses a lump sum and is repaid via fixed EMIs; interest accrues on reducing balance per the loan agreement. An overdraft is flexible: you draw only what you need, and interest typically tracks the utilised overdrawn amount day to day. Credit cards carry separate rules (interest-free periods on purchases, cash-advance fees). Use this page when you want a quick sense of overdraft interest per day and total OD cost for a chosen number of days.
How to lower overdraft interest cost
- Sweep in surplus balances from linked savings or FDs where your bank offers a set-off against the debit.
- Shorten the number of days you stay overdrawn—interest scales linearly with time under simple daily accrual.
- Negotiate the annual rate or switch to a product with a lower effective cost if your cash flows support it.
- Track average balance: for fluctuating debits, model a few scenarios (peak balance vs average) to bracket real interest.
Frequently asked questions
How is overdraft interest calculated?
Overdraft interest is usually charged on the amount you are overdrawn for each day it stays unpaid. A common method is: daily interest equals the overdrawn amount multiplied by the annual interest rate divided by 365. Total interest for a period equals daily interest multiplied by the number of days in that period. This calculator follows that simple daily basis for estimates.
Is interest charged on the full limit or only what I use?
Usually only on the utilised overdrawn amount, not the entire unused limit. Some products may have commitment or unused-line fees—check your sanction letter and schedule of charges.
What is the difference between overdraft and a term loan?
An overdraft lets you withdraw beyond available funds up to an approved limit and interest generally applies to the amount actually overdrawn, often on a daily basis. A term loan provides a fixed disbursal and is repaid on an EMI schedule with interest computed as per the loan agreement.
Does every bank use 365 days for overdraft interest?
Many lenders use a 365-day year for daily interest; some may use 360 or another convention. Your sanction letter or product terms specify the method. This calculator uses 365 days for illustration.
What inputs do I need for this calculator?
Enter the overdrawn amount you want to analyse (average, peak, or a single representative balance), the annual interest rate (p.a.) on the facility, and the number of days in the billing or interest period you want to estimate.
Why might my bank's number differ from this calculator?
Banks may use different day-count conventions, compounding or resting frequency, minimum interest slabs, or post GST and other levies on fees. Use this tool for planning; rely on your account statement for actual debits.
What if my overdrawn balance changes every day?
Your bank typically applies interest on daily balances and sums it for the period. For a rough estimate here, use an average balance over the days you care about, or run two scenarios with a lower and upper balance to see a range.
Are there charges other than interest on an overdraft?
Yes—processing fees, renewal fees, cheque return charges, and penal interest may apply depending on the lender. This calculator only models simple interest on the entered balance and does not include those extras.
Is cash credit (CC) interest the same as overdraft interest?
Both are usually revolving working-capital facilities where interest ties to outstanding debit. Product names and pricing grids differ by bank; the daily-balance concept is still useful for back-of-the-envelope interest estimates.
Does GST apply to overdraft interest?
Tax treatment can depend on whether you are a business and how your bank invoices interest and fees. For personal finance planning, compare all-in costs on your statement, not just the quoted rate.