Account floating interest

About floating interest

In this guide, you can learn how to set up and handle the floating interest for accounts. You can find information about:

• foundational working principles of floating interest for accounts,

• limitations you should consider before going forward with the floating interest method for accounts,

• configuration options explained,

• explanatory examples for choosing the appropriate configuration option for your needs,

• how to control the base rate updates.

Working concepts

When using floating interest for an account, the effective interest rate applied is calculated by subtracting the margin rate from the base rate.

Limitations to consider

Before applying floating interest to calculate account interest, it is essential to consider the following limitations of this calculation method.

• The method is usable only for currency and savings account types.

• The method is applicable only for the positive account balance.

• The applicable effective interest rate can not have a negative value.

• The new base rate fixings can be enforced for future dates but cannot be applied retroactively to past dates.

• The base rates with the value instant of the rate application rule are eligible for the usage of the rate base.

  "rateApplicationRule": "INSTANT"