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Debit & Credit Balances Short Sale Proceeds  Interest on Balances   Accruals  Final Posting
 
  

How to Calculate Interest on: Credit & Debit (Cash and Margin) Balances

Learn how to calculate interest that may be paid to you or charged to you depending on the type of credit (positive) or debit (negative) cash balance that you plan to hold in your account. 

Interest Charged to You

Interest Charged to You on a Negative Cash Balance & Interest Paid to You on a Credit Balance

Interest Paid to You

Interest Paid to You on Positive Cash Balances

Interest Paid to You on Short Sales (Visit Examples Page)

Examples of Debit & Credit Balance Calculations

Examples:  Short Sale Proceeds Calculations  

 

How to Calculate Interest on Short Sale Proceeds


Example: Interest Charged to You

 

When you borrow money, we'll charge you daily interest on your borrowed money as follows:

For all below examples please assume:  

     
Benchmark (BM) Rate    
US Dollar Fed Funds Effective 1.00%    
EONIA (Euro Overnight Index Average) 2.08%    
GBP LIBOR (Overnight Rate) 4.44%    
       
Statement      
USD Securities Commodities Total
Ending Settled Cash -500,000 0 -500,000
       
Tier Balance Cash Interest Calculation
100,000 -100,000 8.33 [100,000 x (1.00% + 2.00%)/360]
100,000 - 1,000,000 -400,000 27.78 [400,000 x (1.00% + 1.50%)/360]
1,000,000 0 0  
Debit interest charged $36.11  

 Interest Calculations Examples

 

 

Example:

Interest Charged to You on a Negative Cash Balance & Interest Paid to You on a Credit Balance

When you have a negative (debit) cash balance in your securities account and a positive (credit) balance in your commodities account, we'll charge you daily interest on the debit balance and pay you daily interest on the credit balance as follows:
 
For all below examples assume benchmark rates as follows:    
     
Benchmark (BM) Rate    
US Dollar Fed Funds Effective 1.00%    
EONIA (Euro Overnight Index Average) 2.08%    
GBP LIBOR (Overnight Rate) 4.44%    
       
Statement      
GBP Securities Commodities Total
Ending Settled Cash -70,000 10,000 -60,000
       
Calculate interest on security account balance -70,000
Tier Balance Cash Interest Calculation
< 70,000 70,000 12.35 [70,000 x (4.439%+2.00%)/365]
70,000 - 650,000 0 0  
> 650,000 0 0  
Debit interest charged £12.35  
       
Calculate interest on commodity account balance 10,000
Tier Balance Cash Interest Calculation
< 7,000 7,000 0 (7,000 x 0/365)
7,000 - 70,000 3,000 0.32 [3,000 x (4.439%-0.60%)/365]
> 70,000 0 0  
Credit interest received £0.32  
 

 Interest Calculations Examples

 

 

Example: Interest Paid to You

When you have an excess positive cash balance, we'll pay you daily interest on that balance as follows:
       
For all below examples assume benchmark rates as follows:    
       
Benchmark (BM) Rate    
US Dollar Fed Funds Effective 1.00%    
EONIA (Euro Overnight Index Average) 2.08%    
GBP LIBOR (Overnight Rate) 4.44%    
       
Statement      
USD Securities Commodities Total
Ending Settled Cash 50,000 0 50,000
       
       
Tier Balance Cash Interest Calculation
< 10,000 10,000 0 (10,000 x 0/360)
10,000 – 100,000 40,000 0.44 [40,000 x (1.00%-0.60%)/360]
> 100,000 0 0  
Credit interest received   $0.44  
 

 

Interest Calculations Examples

 

 

Example: Interest Paid to You on Positive Cash Balances

When you have a positive cash balance in your securities and commodities accounts, we'll pay you daily interest on those balances as follows:
       
For all below examples assume benchmark rates as follows:  
       
Benchmark (BM) Rate    
US Dollar Fed Funds Effective 1.00%    
EONIA (Euro Overnight Index Average) 2.08%    
GBP LIBOR (Overnight Rate) 4.44%    
       
Statement      
USD Securities Commodities Total
Ending Settled Cash 50,000 20,000 70,000
       
Calculate interest on security account balance 50,000
Tier Balance Cash Interest Calculation
< 10,000 10,000 0 (10,000 x 0/360)
10,000 - 100,000 40,000 0.44 [40,000 x (1.00%-0.60%)/360]
> 100,000 0 0  
Credit interest received $0.44  
       
Calculate interest on commodity account balance 20,000
Tier Balance Cash Interest Calculation
< 10,000 10,000 0 (10,000 x 0/360)
10,000 – 100,000 10,000 0.11 [10,000 x (1.00%-0.60%)/360]
> 100,000 0 0  
Credit interest received $0.11  

1Please note that this information is for educational purposes only.  At the present time, Place Trade Financial, Inc. does commodities' trading to its clients.

 

How to Calculate Interest on Short Sale Proceeds ~ View Examples

Learn about Interest Rates (Basic)

 

Interest Calculations Examples

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