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2014-02-25 16:43:05.0

Interest Rates Based on Banks’ Reports to NBS

Weighted average interest rates on citizen current account overdrafts are calculated and reported to the NBS by banks. It is based on these interest rates that the NBS has published on its website the information on the rates charged on current account overdrafts.

However, what the citizens need to know is that the actual amount charged by banks depends on the nominal interest rate agreed between clients and banks, but also on the method and frequency of interest calculation and collection. To illustrate, if interest calculation is performed more frequently than collection, interest is accrued to debt, and the client ends up paying compound interest. In other words, the actual cost is higher than what it may seem based on the level of the agreed nominal interest rate alone.

Governor`s Office