Changing a rate

Every account earns or pays at a rate. How that rate is decided differs by product, and so does what you do when it has to move.

Three actions sit behind the account’s Actions menu:

Your organisation decides which of the three each product offers, and what each one is called on screen. A fee-bearing deal, for example, may show Rate reset as “Change fee rate”.

These actions are about interest — the rate an account accrues on, day after day. A one-off charge is a different thing. It comes from a price list, and you change it there. See price types.

How a rate is decided

A rate reaches an account by one of three routes.

flowchart LR
    A[Published table] -->|the account is bound to a band| B[Stamped on the account]
    C[Published series] -->|read again every day| D[Series + margin]
    E[Negotiated with the customer] --> F[Stamped on the account]
    B --> G[Today's interest]
    D --> G
    F --> G

Stamped means the rate is a figure held on the account. It stays put until something restamps it. Series means the account holds the name of a published rate, not a number, so it re-reads that series every day and follows it without anyone touching the account.

Knowing which route a product uses tells you which action to reach for.

Setting the rate yourself

Use Change rate on a product whose rate is a stamped figure.

1. Open the account and select Actions, then Change rate.
2. Check the rate the form offers.
3. Enter the rate you want, if it differs.
4. Select Apply.
5. Review the change in Studio, then select Submit for approval.

The form opens pre-filled. Where the product has a published table, it offers the rate that table quotes for this account today. Where it has no table, it offers the rate the account already carries. Either way, submitting without changing anything is refused.

Departing from the published rate

Where a published table quotes the rate, entering a different figure is an override. Your organisation grants that permission separately, so a clerk without it can accept the quote but cannot beat it.

An override also changes what the account is: it stops being table-priced and becomes negotiated. That matters later, because a negotiated account no longer follows the table.

Putting the account back on the quoted rate reverses it. Enter the quoted figure and the account is table-priced again.

Following a published series

On a product priced off a published series, Change rate asks two questions instead of one: which series, and what margin over it.

You pick the series from the list your organisation offers for that product. The margin is a percentage added to whatever the series reads on the day.

Take Woodgrove Bank’s prime series at 11.50% and a margin of 2.50%. The account prices at 14.00%.

Nobody has to touch the account when prime moves. The account holds the series, so tomorrow it reads tomorrow’s prime. What that 14.00% is worth in money depends on the account’s day count convention — see day count conventions.

Ceilings and floors

A product can carry a ceiling, a floor, or both. They apply to the finished rate, after the margin is added.

An account at a stamped 8.00% with a margin of 1.50% prices at 9.50%. Give the product a ceiling of 9.00% and the same account prices at 9.00% instead.

These are rates, not interest. No day count convention is involved until the interest is worked out.

Resetting a fixed rate

Use Rate reset on a deal written at a fixed rate. It stamps the new rate and, where your organisation has set the product up that way, re-solves the repayment schedule so the deal still clears by its end date.

On such a deal, the reset is the only thing that moves the rate. Nothing resets it for you when a fixing date arrives — somebody has to do it.

Recording the rate basis

Change rate basis records the terms the deal’s rate is written against: the reference rate named in the contract, how often it is refixed, how many days before each fixing it is read, and the margin.

On a deal priced from a stamped rate, this is a record, not a repricing. Changing the basis does not change what the account accrues today. It tells the next person — and the next regulatory extract — what the deal is written on. Use Rate reset to move the money.

On a product priced off a published series, the margin is part of the rate, and Change rate is where you change it.

The date it takes effect

A rate change is a dated fact. The day you capture it is not necessarily the day it takes effect.

Where the change admits a date, the form shows Value Date. The picker offers only the dates that change accepts — some changes look forward only, some back only, some both. Where a change admits no date, no picker appears, and the change takes effect on the current trading day. Which you get is set up per product by your organisation.

Two backdated rate changes each restate the interest in their own right. You end on the interest recomputed from both, never on a figure either change left behind.

Rate basis changes carry no value date. They are recorded on the day you make them.

Full detail on dated changes, including how to cancel one that has not taken effect yet, is in value dating.

What moves with the rate

Changing the rate rarely changes only the rate.

• Interest. Every day on or after the value date is worked out again. See how interest is calculated.
• Repayments. On a product configured to re-solve, the instalments move so the balance still clears on time. Only the action your organisation nominated does this — the same rate entered through a different action leaves the schedule alone.

Rates that move on their own

A table-priced account and a series-priced account both move without an operator. Three things do it.

A published table is re-cut. Every account still priced off that table follows it. An account overridden to a negotiated rate does not.

Woodgrove Bank cuts its 32-day table rate from 6.00% to 5.00%. A table-priced account moves to 5.00%. An account negotiated at 7.50% stays at 7.50%.

The balance crosses a band. Where a table prices by balance, a deposit or a withdrawal can move the account into a different band, and the whole balance reprices.

An account holding 10,000 prices in the lowest band at 6.00%. A top-up takes the balance to 150,000, which the table prices at 6.50%. The whole 150,000 earns 6.50%, and that same day’s interest already uses it. The interest divides by the calendar year’s actual length, the ActualActual convention — 365 days in 2026.

A published series moves. This needs nothing at all. An account holding the series reads the new value the next time interest is worked out.

Who can change a rate

All three actions normally need a second person. You submit; somebody else countersigns; the change applies once they do. See countersign.

Beating a published quote needs the override permission on top of that, checked against you when you submit — not against your approver.

Every rate change is kept with the date it takes effect, so asking what the account was priced at on any past day gives the rate that was in force that day. The Change List panel shows who asked for each change and who countersigned it.