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Examples of Interest Calculations
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Examples:

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 Sale Cash Proceeds & Excess Cash, and Interest Charged to You on a Debit Balance

Interest Paid to You on Short Sale Proceeds

Interest Paid to You on Short Sale Cash Proceeds & Excess Cash in a Securities & Commodities Account


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 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 -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  

 

 

 

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  

 

 

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  

 

 

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  

 

Example: Interest Paid to You on Short Sale Cash Proceeds & Excess Cash, and Interest Charged to You on a Debit Balance

In this example, you have securities short sale cash proceeds, and an Excess Cash (credit) balance in your Commodities account, but you also have a negative (debit) balance from borrowed cash. 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      
USD Securities Commodities Total
Short Sale Cash Proceeds 680,000 - 680,000
Borrowed Cash -180,000 - -180,000
Excess Cash - 120,000 120,000
Ending Settled Cash 500,000 120,000 620,000
       
Calculate interest on short stock value 680,000
Tier Balance Cash Interest Calculation
< 100,000 100,000 0 (100,000 x 0/360)
100,000 -1,000,000 580,000 0 [580,000 x (1.00%-1.35%)/360]
1M -3M 0 0  
> 3M 0 0  
Short credit interest received   $-  
       
Calculate interest on security account balance -180,000
Tier Balance Cash Interest Calculation
< 100,000 100,000 8.33 [100,000 x (1.00% + 2.00%)/360]
100,000 - 1,000,000 80,000 5.55 [80,000 x (1.00% + 1.50%)/360]
1M – 3M 0 0  
> 3M 0 0  
Debit interest charged   $13.88  
       
Calculate interest on commodity account balance 120,000
Tier Balance Cash Interest Calculation
< 10,000 10,000 0 (10,000 x 0/360)
10,000 - 100,000 90,000 1 [90,000 x (1.00%-0.60%)/360]
> 100,000 20,000 0.36 [20,000 x (1.00%-0.35%)/360]
Credit interest received   $1.36  

 

 

Example: Interest Paid to You on Short Sale Proceeds

When you sell stock short and receive cash proceeds, we'll pay you daily interest on those proceeds as follows:
       
Statement      
USD Securities Commodities Total
Short Sales Proceeds 1,500,000 0 1,500,000
Excess Cash 150,000 0 150,000
Ending Settled Cash 1,650,000 0 1,650,000
       
       
Calculate interest on short stock proceeds value 1,500,000
Tier Balance Cash Interest Calculation
< 100,000 100,000 0 No payment on balances < 100,000
100,000 - 1,000,000 900,000 0 [900,000 x (1.00%-1.35%)/360]
1,000,000 - 3,000,000 500,000 5.55 [500,000 x (1.00%-0.60%)/360]
Short credit interest received $5.55  
       
Calculate interest on security account excess cash balance 150,000
Tier Balance Cash Interest Calculation
< 10,000 10,000 0 (10,000 x 0/360)
10,000 - 100,000 90,000 1.00 [90,000 x (1.00%-0.60%)/360]
> 100,000 50,000 0.9 [50,000 x (1.00%-0.35%)/360]
Credit interest received $1.90  

 

 

Example: Interest Paid to You on Short Sale Cash Proceeds & Excess Cash in a Securities & Commodities Account

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      
EUR Securities Commodities Total
Short Cash Proceeds 70,000 - 70,000
Excess Cash 5,000 25,000 30,000
Ending Settled Cash 75,000 25,000 100,000
       
Calculate interest on short stock value 70,000      
Tier Balance Cash Interest Calculation
< 80,000 70,000 0 (70,000 x 0/360)
> 80,000 0 0  
Short credit interest received   € -  
       
Calculate interest on security account balance 5,000
Tier Balance Cash Interest Calculation
< 8,000 5,000 0 (5,000 x 0/360)
8,000 - 80,000 0 0  
> 80,000 0 0  
Credit interest received € -  
       
Calculate interest on commodity account balance 25,000
Tier Balance Cash Interest Calculation
< 8,000 8,000 0 (8,000 x 0/360)
8,000 - 80,000 17,000 0.70 [17,000 x (2.08%-0.60%)/360]
> 80,000 0 0  
Credit interest received € 0.75  

 

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