With Saxo Bank, you can earn interest on your uninvested cash, but there can also be circumstances, where the interest amount is deducted from your account.
Let’s look at the way, Saxo Bank calculates interest on deposits and detailed examples.
Interest calculation components
Interest on your main account is calculated on the Net Free Equity (NFE). Interest on sub-accounts is calculated on the Account Value. The interest is calculated daily and booked monthly.
- Positive NFE/Account value above thresholds will be given interest according to your account tier (when the currency has a positive rate). In the example below, Client A.
- Negative NFE/Account value will be deducted interest. In the example below, Client B.
The Net Free Equity is:
- The value-dated cash balance of your main trading account, plus or minus cash balances on your sub-accounts in the same currency
- Plus or minus any unrealized profits or losses from open CFDs, FX Forwards, and Futures on your main trading account and sub-accounts in the same currency
- Plus the market value of any FX Options on your main trading account and sub-accounts in the same currency
- Minus any margin required for financing open positions on your main trading account and sub-accounts regardless of sub-account currency
The account value of a sub-account is:
- The value-dated cash balance of accounts in the same currency
- Plus or minus the value of any unrealized profits or losses from open CFDs, FX Forwards, and Futures on accounts in the same currency
- Plus the market value of any FX Options on accounts in the same currency
Calculation formula
On your main account
| Interest on NFE = |
Net Free Equity* x Interest Rate x Interest days ___________________________________________ |
| Interest Days in Currency |
On sub-accounts
| Interest on Account value = |
Account value* x Interest Rate x Interest days ___________________________________________ |
| Interest Days in Currency |
*Adjusted for any threshold or floor
Client interest calculations examples
In the below examples, we describe the interest calculations for 2 different clients. The interest for clients A and B is calculated on NFE. When calculating an interest rate, Saxo applies markup/markdown to a benchmark rate.
You can read more about benchmark rates, thresholds, and markup/markdown rates on our homepage.
The numbers mentioned below are all indicative.
Client A
| Calculation date | Booking date | Value-dated cash balance USD | Interest Unrealized PL USD | Interest margin requirement USD | Net Free Equity USD | Annual interest rate | Interest Days | Interest amount USD |
| 23-Sep-2022 | 50,000 | -1,000 | 10,000 | 39,000 | 2.25% | 1 | 2.44 |
For Client A the interest gain on a given date is USD 2.44, calculated as:
|
2.44 = |
39,000 x 2.25% x 1 _______________ |
|
360 |
Interest rate calculation: The interest rate of 2.25% is calculated as a difference between the 3.25% benchmark rate and -1% markdown (Indicative).
NFE (positive) calculation: 50,000-1,000-10,000 = 39,000
| The value-dated cash balance of your main trading account, plus or minus cash balances on your sub-accounts in the same currency | 50,000 |
| Plus or minus any unrealized profits or losses from open CFDs, FX Forwards, and Futures on your main trading account and sub-accounts in the same currency | -1,000 |
| Plus the market value of any FX Options on your main trading account and sub-accounts in the same currency | 0 |
| Minus any margin required for financing open positions on your main trading account and sub-accounts regardless of sub-account currency | -10,000 |
Client B
| Calculation date | Booking date | Value-dated cash balance USD | Interest Unrealized PL USD | Interest margin requirement USD | Net Free Equity USD | Annual interest rate | Interest Days | Interest amount USD |
| 23-Sep-2022 | 10,000 | -1,000 | 10,000 | -1,000 | 10 % | 1 | -0.28 |
For Client B the interest loss on a given date is USD -0.28, calculated as:
|
-0.28 = |
-1000 x 10% x 1 _________________ |
|
360 |
Interest rate calculation: The interest rate of 10% is calculated as a sum of the 2% benchmark rate and 8% markup (Indicative).
NFE (negative) calculation: 10,000-1,000-10,000 = -1,000
| The value-dated cash balance of your main trading account, plus or minus cash balances on your sub-accounts in the same currency | 10,000 |
| Plus or minus any unrealized profits or losses from open CFDs, FX Forwards, and Futures on your main trading account and sub-accounts in the same currency | -1,000 |
| Plus the market value of any FX Options on your main trading account and sub-accounts in the same currency | 0 |
| Minus any margin required for financing open positions on your main trading account and sub-accounts regardless of sub-account currency | -10,000 |
Interest settlement and reporting
The interest is calculated daily and booked monthly. You can follow daily charges in interest reports on the trading platform under the Historic Reports section. If you have trouble, finding your interest report, use the detailed description on how to find account reports.