Document ID: chunk:federal_register_of_legislation:C2025C00161:section:47
Version: federal_register_of_legislation:C2025C00161
Segment Type: section
Provision Reference: s 47
Character Range: 38700–40503

47  Calculation of the allocation rate

Application of steps
 (1) To work out the allocation rate for a quarter, apply the following steps.

Adjusted total balances
 (2) Calculate the adjusted total balances for the quarter by:
 (a) working out, for each day in the quarter, the total balances of all the accounts; and
 (b) adding up those totals; and
 (c) 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
 (3) 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.
Note: Net interest amount is defined by section 39.

Total balances
 (4) Calculate the total balances for the quarter by:
 (a) working out, for each day in the quarter, the total balances of all the accounts; and
 (b) adding up those totals; and
 (c) dividing the result by the number of days in the quarter.

Capped rate
 (5) 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.
Note: Gross interest amount is defined by section 38.

Allocation rate—comparison between provisional rate and capped rate
 (6) Compare the provisional rate with the capped rate:
 (a) if the provisional rate is less than or equal to the capped rate—the allocation rate equals the provisional rate; or
 (b) if the provisional rate exceeds the capped rate—the allocation rate equals the capped rate.

Division 5—Crediting of interest