CC and OD interest calculator
Reviewed 4 November 2026 · Prateesh Nair, BISFIOPS Private Limited
Interest on a cash credit or overdraft is charged only on the amount you use, usually on each day's closing balance. Enter your limit, your rate and either your average balance or your daily balances to see this month's interest, the yearly cost and what 10% lower usage would save. To size the limit itself, use the CC and OD limit estimator.
Estimate for planning, not an offer. Type your own rate from your sanction letter.
Or paste daily closing balances
One balance per line, or separated by commas, for each day of the month. Overdrawn balances can be entered as positive numbers. Processed in your browser and never stored.
How the interest is worked out
Interest for the month is the sum of each day's outstanding balance × the annual rate ÷ the days in the year. With an average balance, that is average used × rate × days in the month ÷ 365. Banks usually use a 365-day year; check your sanction letter and change the basis above if yours differs.
Worked example (illustration, not a quote)
A ₹50 lakh limit with ₹30 lakh used on average, at an illustrative 10% a year, gives ₹24,658 of interest for a 30-day month (3,000,000 × 10% × 30 ÷ 365). Bringing average use down by 10%, to ₹27 lakh, saves about ₹2,466 that month.
Why usage matters beyond interest
- A limit used close to its maximum every month can weigh on your CMR and on renewal.
- Collecting old debtors faster lowers both the balance and the interest.
- Long-term needs like machinery are usually cheaper and safer on a term loan than on a CC.
Questions we are asked
How is interest calculated on a cash credit account?
Interest is charged on the amount you use, usually on each day's closing balance: the sum of daily balances × annual rate ÷ days in the year. It is typically debited monthly.
Is interest charged on the full CC limit?
No. Interest is charged only on the amount drawn, not on the unused part of the limit. Some banks charge a separate fee on unused limits; check your sanction letter.
How can I reduce CC interest?
Lower the average balance: collect debtors sooner, avoid holding excess stock, and move long-term needs to a term loan. Even 10% lower usage cuts the interest by about 10%.
Sources: RBI
Written by Prateesh Nair, Director, BISFIOPS Private Limited (CIN U66190MH2026PTC475143), Malad East, Mumbai. General information, not personal advice; lenders decide final terms.