Interest is:
- Earned on deposits swept into the network
- Paid on deposits received from the network
Sending banks earn interest on deposits swept into the network. At the end of the month, receiving banks credit accrued interest into their receiving account to cover the interest payable expense for that month.
The interest rate earned on off-balance sheet deposits is a weighted-average rate paid by the receiving banks. Interest is accrued daily and paid monthly. Simple interest is calculated on deposits stored off balance sheet, where daily interest accrued is based on the balances at end of day.
The sending bank earns interest from the network, and, in general, has full control over how much interest to pass on to depositors.
For further details around interest and disbursement, please contact the ModernFi team.