Calculation of the allocation rate
47 Calculation of the allocation rate
Application of steps
To work out the allocation rate for a quarter, apply the following steps.
Adjusted total balances
Calculate the adjusted total balances for the quarter by:
working out, for each day in the quarter, the total balances of all the accounts; and
adding up those totals; and
dividing the result by the number of days in the quarter.
For the purposes of this calculation, if an account balance actually exceeds $1,200, the account balance is taken to be $1,200.
Provisional rate
Calculate the provisional rate for the quarter as a percentage (to 4 decimal places) using the formula:
where:
Net interest amount means the net interest amount for the quarter;
Adjusted total balances means the adjusted total balances for the quarter.
Net interest amount is defined by section 39.
Total balances
Calculate the total balances for the quarter by:
working out, for each day in the quarter, the total balances of all the accounts; and
adding up those totals; and
dividing the result by the number of days in the quarter.
Capped rate
Calculate the capped rate as a percentage (to 4 decimal places) using the formula:
where:
Gross interest amount means the gross interest amount for the quarter;
Total balances means the total balances for the quarter.
Gross interest amount is defined by section 38.
Allocation rate—comparison between provisional rate and capped rate
Compare the provisional rate with the capped rate:
if the provisional rate is less than or equal to the capped rate—the allocation rate equals the provisional rate; or
if the provisional rate exceeds the capped rate—the allocation rate equals the capped rate.
This Act’s bill:Second reading speech
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