Operations
Understanding daily accruals
Starting from September 2026, the bank will move from monthly to daily accruals.
Cissonius (domi)··3 min
At present Monument Bank calculates interest to be paid on a monthly basis. This means that the interest earned on any balances is calculated from the balance at the end of each month. However, starting from September 2026, the bank will transition to daily accruals, where interest and overdraft charges will be calculated from each day’s settled balance and applied through the monthly update. We believe it is useful to highlight these changes as fundamentally it will change how we pay your interest or overdraft charges each month.
How it works
Every day your balance earns 1/days of the month of the monthly rate. If you were to hold 1,000 diamonds for all of August with 31 days you get the same 12.56 you always did. If you instead hold it for 20 days and you now get 20 days worth of interest instead of nothing.
What that looks like
The current monthly model has benefits and drawbacks. The primary item we sought to address with this change is to stop penalising our clients who need to spend their savings before interest day.
Interest payments
Your diamonds now earn for every day you hold it, not for the one day we happened to look at the balance. You are no longer penalised for actually spending your held cash. However for clients who take full advantage of the interest rate offered by their Monument Bank and would deposit on the last day of the month, this will negatively affect this practice.
| Day spent | Old Model | New Model |
|---|---|---|
| 5 | 0 | 2.91 |
| 10 | 0 | 6.55 |
| 15 | 0 | 10.19 |
| 20 | 0 | 13.83 |
| 25 | 0 | 17.47 |
| 30 | 0 | 21.11 |
A critical point to note is that interest applies to your full settled balance, including funds marked as ‘reserved’ for scheduled payments or pending order book purchases. Reserving funds does not move them out of your account, so it will not reduce the interest you earn or create overdraft charges by itself. Your accrual balance changes only when the underlying transaction settles and your account balance changes. This means you can leave orders resting on the order book without sacrificing interest.
Overdraft charges
On a similar note this change also affects how we calculate overdraft spending charges. Monument Banks client account overdraft is intended to be a short-term lending product, designed to cover client charges using funds borrowed against the bank. Those who use the overdraft function on their account were treated unfairly depending on when they repaid their overdraft in terms of cost.
| Days Overdrawn | Old Cost | New Cost | Saving | Cheaper By |
|---|---|---|---|---|
| 1 | 75 | 2.42 | 72.58 | 97% |
| 2 | 75 | 4.84 | 70.16 | 94% |
| 3 | 75 | 7.26 | 67.74 | 90% |
| 7 | 75 | 16.93 | 58.06 | 77% |
| 14 | 75 | 33.87 | 41.13 | 55% |
| 21 | 75 | 50.81 | 24.19 | 32% |
| 31 | 75 | 75 | 0 | 0% |
The last row is the key one: borrowing that runs to the end of the month never costs more than it did before. Inversely, if you were overdrawn during the month but repaid before the update ran, the old model saw a settled balance and charged nothing at all. That borrowing is now charged at the same daily rate as everyone else.
| Overdrawn on | Old Outcome | New Outcome |
|---|---|---|
| Days 1-10 | +10.56 (interest earned) | -12.20 |
| Days 11-20 | +10.56 (interest earned) | -12.20 |
| Days 22-31 | -60 | -12.20 |
Unchanged items
Flat-fee structured items remain unchanged as part of the shift to daily accruals. That includes:
- Asset management fees (previously BMS fee), remains capped at most 100d/month.
- Custom sort-code fee remains the same.
Rate changes
Monument Bank is looking at how we can decrease the overall overdraft usage rate which sits at 7.5% currently. Similarly we are going to leverage the impacts of this change to investigate increases to the overall current interest rate structure, boosting interest earned for our clients.
Any and all rate changes will be communicated directly to your Monument Bank account.
Transparency
Monument Bank is committed to fair and transparent banking practices. If you have any questions, comments, concerns or wish to receive a detailed run-down of your interest payment, we can provide as such if you raise a ticket via the #contact-mg channel in the Pavia Discord.