Rate of accrual, and crediting, of interest
50 Rate of accrual, and crediting, of interest
When section applies
This section applies to interest that accrues under section 49.
Allocation day event, withdrawal event and inactive account debit event
Both:
the rate of accrual of interest to an account in respect of a particular day (the accrual day) in a particular quarter; and
the time at which accrued interest in respect of the accrual day is to be credited to the account;
depends on whichever of the following events first happens after the accrual day:
the occurrence of the allocation day for the quarter (this event is to be known as the allocation day event);
the withdrawal under Part 7 of the balance of the account (this event is to be known as the withdrawal event);
the debiting of the balance of the account from the Special Account under Part 9 (this event is to be known as the inactive account debit event).
Allocation day event
If the allocation day event comes first:
the rate of accrual is the percentage worked out (to 6 decimal places) using the formula:
where:
Allocation rate means the allocation rate for the quarter; and
the accrued interest is to be credited to the account on the allocation day.
Withdrawal event
If the withdrawal event comes first:
the rate of accrual is the percentage worked out (to 6 decimal places) using the formula:
where:
Adjusted allocation rate means the last allocation rate that was published in the Gazette before the accrual day; and
the accrued interest is to be credited to the account on the day before the day of the withdrawal.
Inactive account debit event
If the inactive account debit event comes first:
the rate of accrual is the percentage worked out (to 6 decimal places) using the formula:
where:
Adjusted allocation rate means the last allocation rate that was published in the Gazette before the accrual day; and
the accrued interest is to be credited to the account on the day of the debit.
Transitional—withdrawal event before first allocation day
Despite paragraph (4)(a), if the withdrawal event occurs before the allocation day for the quarter beginning on 1 July 1995, that paragraph has effect, in relation to that event, as if the adjusted allocation rate were 0.4% or such higher rate as the Finance Minister determines.
This Act’s bill:Second reading speech
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