How is interest calculated and applied to my deposit account?
To understand how interest applies to your account, please review the relevant Product Schedule, available here.
Current interest rates, including any bonus rate terms and conditions, can be found here, or by contacting us.
Below are examples explaining the two main types of interest structures that apply to our accounts: Tiered and Strata.
Tiered Interest
A single interest rate applies to your entire balance.
Under a tiered interest structure, the interest rate your account earns depends on which balance tier your total balance falls into. Once your balance is in a tier, that tier’s rate applies to your whole balance, not just part of it.
Example:
Mary holds an account with an opening balance of $12,000.
The following Tiered interest rates apply:
| Balance | Interest Rate |
| $0 - $4,999 | 1.00% p.a. |
| $5,000 - $19,999 | 2.00% p.a. |
| $20,000+ | 3.00% p.a. |
Because Mary’s balance of $12,000 sits in the $5,000–$19,999 tier, her entire $12,000 earns 2.00% p.a.
Daily interest calculation
Daily interest = $12,000 × 2.00% ÷ 365 = $0.66 per day
Monthly interest
If the month has 30 days:
$0.66 × 30 = $19.80 interest, paid to Mary’s account at month-end.
Strata Interest
Different rates apply to different parts (“strata”) of your balance.
Under a strata interest structure, your balance is divided into portions, and each portion earns the rate assigned to that strata (or tier). This means different parts of your balance may earn different rates.
Example:
Gerald holds an account with an opening balance of $12,000.
The following Strata interest rates apply:
| Portion of Balance | Interest Rate |
| First $4,999 | 1.00% p.a. |
| Next $15,000 (up to $19,999) | 2.00% p.a. |
| Amount above $20,000 | 3.00% p.a. |
Gerald’s balance is divided like this:
- First $4,999 earns 1.00% p.a.
- Next $7,001 (the portion above $5,000 up to $12,000) earns 2.00% p.a.
Daily interest calculation
- Strata (Tier) 1:
$4,999 × 1.00% ÷ 365 = $0.13 per day - Strata (Tier) 2:
$7,001 × 2.00% ÷ 365 = $0.38 per day
Total daily interest = $0.51
Monthly interest
If the month has 30 days:
$0.51 × 30 = $15.30 interest, which is paid to Gerald’s account at month-end.
Important information
The information and examples provided on this page are for general information only. They are designed to explain different interest calculation methods and do not reflect the actual interest rates offered by Newcastle Permanent.
The examples are illustrative only and may differ from how interest is calculated on our products, including due to differences in rounding, calculation frequency, or product features.