Partial and whole balance methods

Tiering determines whether one rate applies to the full balance or different rates apply to portions of it. Flinq supports whole-balance and partial-balance methods for interest and payout profiles.

Example tiers

• GBP 0 up to, but not including, GBP 1,000,000: 1.00%

• GBP 1,000,000 up to, but not including, GBP 5,000,000: 1.50%

• GBP 5,000,000 and above: 2.00%

Whole balance

The balance determines the applicable tier, and that tier's rate applies to the full balance.

For an illustrative balance of GBP 2,000,000:

GBP 2,000,000 × 1.50% = GBP 30,000

For an illustrative balance of GBP 7,000,000:

GBP 7,000,000 × 2.00% = GBP 140,000

Partial balance

Each rate applies only to the portion of the balance within its tier.

For an illustrative balance of GBP 2,000,000:

• First GBP 1,000,000 × 1.00% = GBP 10,000

• Next GBP 1,000,000 × 1.50% = GBP 15,000

• Total = GBP 25,000

The effective annual rate is GBP 25,000 ÷ GBP 2,000,000 = 1.25%.

For an illustrative balance of GBP 7,000,000:

• First GBP 1,000,000 × 1.00% = GBP 10,000

• Next GBP 4,000,000 × 1.50% = GBP 60,000

• Remaining GBP 2,000,000 × 2.00% = GBP 40,000

• Total = GBP 110,000

The effective annual rate is GBP 110,000 ÷ GBP 7,000,000 = approximately 1.57%, rounded to two decimal places.

Cash management charges

• With whole-balance payout tiering, the applicable CMC percentage is applied to all gross interest.

• With partial-balance payout tiering, each CMC percentage is applied to the interest earned within that tier.

The final amount for a payment period also depends on the profile's day-count convention and the number of days included.