Surplus Parking Engine · MaxGain / Reach Style
Home Loan Overdraft Calculator
Calculate annual and lifetime interest saved by parking surplus cash in a home loan overdraft account (SBI MaxGain, HDFC Reach). Project the effective rate and parking strategy in seconds.
Verdict
Moderate Case — Parking Helps
Effective principal: 60%
Annual Interest Saved
₹1,00,200
Lifetime: ₹20,04,000
Annual Interest (Regular Loan)₹2,55,000
Annual Interest (Overdraft)₹1,54,800
Effective Annual RateEffective Principal Earning Interest: ₹18,00,000
5.16%Annual Interest Saved₹1,00,200
Annual Interest (Overdraft)
₹1,54,800(61%)
Annual Interest (Regular Loan)
₹2,55,000(39%)
How to Decide Whether a Home Loan Overdraft Saves You Money
- Step 1Estimate your average parking balance
Salary credits plus surplus savings kept in the OD.
- Step 2Compare the rates
A 0.10%-0.50% premium is typical.
- Step 3Calculate the savings
Each ₹10L parked saves ₹85,000/year at 8.5%.
- Step 4Weigh the liquidity benefit
OD keeps your cash accessible.
Frequently Asked Questions
What is a home loan overdraft?
A home loan overdraft (e.g. SBI MaxGain, HDFC Reach) is a hybrid home loan where the bank sanctions a limit (say ₹50L) but you only pay interest on what you actually draw. Any surplus cash you park in the linked overdraft account reduces your effective principal and the daily interest accrual.
How much do I save per year by parking ₹10Lakh in my OD account?
For every ₹10Lakh parked at an OD rate of 8.5%, you save ₹85,000 per year in interest (₹10,00,000 × 8.5%). The actual saving depends on the OD rate, your average parked balance, and the rate differential with a regular term loan.
Does parking money in an OD account reduce my principal?
No — parking cash in the OD account does NOT reduce your sanctioned limit or your principal outstanding. It only reduces the daily utilization that interest is charged on. Your monthly interest bill drops, but the principal balance remains the same until you formally prepay.
Is the OD rate higher than a regular home loan rate?
Often yes. OD loans carry a 0.10% to 0.50% rate premium over the equivalent regular term loan. The trade-off is liquidity — your money remains accessible in the OD account, and the OD rate × parked balance is your effective return.
Can I park my salary into the OD account?
Yes. Most lenders allow standing instructions to sweep salary directly into the OD account. Many borrowers keep 2-3 months' expenses in the OD account and route every rupee of surplus cash through it before parking the rest in FDs or mutual funds.