At BBVA Germany, current account interest rates are calculated according to the standard tiered interest rate method used by banks.

This method ensures that the interest is calculated separately and fairly for each day within a defined billing period.

With BBVA Germany, the balance interest for the current account (including the Savings Box) is calculated monthly.

The calculation is performed in several steps:

1. Sorting the transactions chronologically: First, all incoming and outgoing payments in the billing period are sorted according to their value date. The value date is the day from which an amount is actually available in the account. Starting on this day, the amount changes the available account balance and is included in the interest calculation. The value date may differ from the booking date, which only indicates when a payment was recorded in the system.
2. Determining the account balance and the time periods: For each business day, the final balance is determined based on the value date (status ca. 9:00 PM). This daily status can be a credit or an overdraft and will be used for calculating interest until a new payment takes effect and the account balance changes.
3. Determining the interest figures: For each of these account balances, a so-called interest rate is calculated. A calculation is made based on the account balance and the number of days for which this balance applies. This summarizes the amount and duration.
   Formula: Debit interest = (balance × days) / 100
   A credit balance results in credit interest, while a debit balance results in debit interest.
4. Final interest calculation: The next step will add together all the interest rates that were previously calculated. This total amount summarizes how high and how long the credit balance (or overdraft) existed during the billing period. Then you calculate which proportion of the annual interest rate falls exactly during this time. This results in the gross interest amount for the accounting period. Formula: Interest amount = (sum of interest figures × interest rate per annum) / days of the year
5. Calculation of the net amount: The legally required taxes are then deducted from the gross interest amount. The remaining amount is the net amount that will actually be credited to your account.

We pay interest on credit balances for the period starting on July 1 and ending on July 31 (31 days), assuming a credit interest rate of 3.00% p.a.

• Account balances and time periods:
  - July 1 - July 7 (7 days): Balance of €5,000.00
  - July 8 - July 31 (24 days): Balance of €18,000.00
• Determining the credit interest rates:
  - (€5,000.00 × 7 days) / 100 = 350
  - (€18,000.00 × 24 days) / 100 = 4,320
• Sum of interest figures: 350 + 4320 = **4670**
• Final interest calculation: (4670 × 3.00) / 365 = **€38.38**

The gross interest income calculated for this period is therefore €38.38.

In Germany, up to three types of tax are incurred on gross interest income:

• Capital gains tax: 25%
• Solidarity surcharge: 5.5% of the capital gains tax amount.
• Church tax: 8% or 9% of the capital gains tax amount if the customer is subject to church tax.

Important to keep mind: These taxes are only incurred if the annual savings allowance (€1,000 for single persons / €2,000 for married persons) has already been exhausted by an exemption order.