Social Sciences

Bank Account Settlement Examples 2

The settlement method is called the Hamburg method:
1st- Obtaining the balances on the value date that generate the account movements
2nd- Obtaining the days that each of the balances by value date remains in force
3rd- Obtaining the so-called numbers commercial, which consists of multiplying each balance in value by the number of days that it remains in force. It must be borne in mind that the balances of a checking account can only be of two types of credit or overdraft.
4º- We add the commercial numbers according to their type, creditors or overdraft and multiply them by the result of dividing the corresponding interest rate (in terms of one) by the number of days in the year (365, 366 or 360 ).

Obviously, no year has 360 days, but the denominator of interest when it is the owner or owners of the account who have to pay them is 360 days and how long the financial institution has to pay them will be 365 or 366 days.

Example of settlement of a checking account using the Hamburg system:

Suppose we find the following bank statement that contains the following balances on value date:
Creditor interest rate: 1.25% per annum
Debtor interest rate: 14.6% per annum

Settlement :
Commercial number = Balance in F. Value x Number of unchanged days
Creditors Int = 1971 x 0.0125 / 365 = € 0.0675
Debtors Int. = 1380 x 0.146 / 360 = € 0.559

Thus, the result of the settlement will be the difference between the creditor interest minus the debtor interest.

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