Pricing > Interest and Financing > Calculations
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
Example: Interest Charged to You
When you borrow money, we'll charge you daily interest on your borrowed money as follows:
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For all below examples please assume:
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| Benchmark (BM) |
Rate |
|
|
| US Dollar Fed Funds Effective |
1.00% |
|
|
| EONIA (Euro Overnight Index Average) |
2.08% |
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|
| GBP LIBOR (Overnight Rate) |
4.44% |
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| Statement |
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| 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 |
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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: |
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| For all below examples assume benchmark rates as follows: |
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|
| |
|
|
| Benchmark (BM) |
Rate |
|
|
| US Dollar Fed Funds Effective |
1.00% |
|
|
| EONIA (Euro Overnight Index Average) |
2.08% |
|
|
| GBP LIBOR (Overnight Rate) |
4.44% |
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| Statement |
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| GBP |
Securities |
Commodities |
Total |
| Ending Settled Cash |
-70,000 |
10,000 |
-60,000 |
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| 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 |
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| |
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| 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 |
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Example: Interest Paid to You
| When you have an excess positive cash balance, we'll pay you daily interest on that balance as follows: |
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|
|
|
| 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 |
| |
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|
| |
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| 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 |
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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 |
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| 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 |
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1Please note that this information is for educational purposes only. At the present time, Place Trade Financial, Inc. does commodities' trading to its clients.
Interest Charged to You on a Negative Cash Balance & Interest Paid to You on a Credit Balance
Interest Paid to You on Short Sales (Visit Examples Page)
Learn about Interest Rates (Basic)
