Interest schedules, value dates, turnover commission: decoding your bank statement of charges
The quarterly interest statement is the least read and most instructive banking document there is. How to break it down line by line, where the most frequent overcharges hide, and how to prepare a renegotiation backed by figures.
Every quarter your bank sends you an interest schedule. It is a dense document, poorly laid out, and almost never analysed. Yet it is the only place where the full cost of the banking relationship actually appears — and the place where the most frequent configuration errors sit.
The four components
| Component | Calculation basis | Order of magnitude | Negotiable |
|---|---|---|---|
| Debit interest | Debit balances × rate / 36,000 | Reference rate plus a margin of 1 to 4 points | Yes, strongly |
| Highest-overdraft commission | Largest overdraft of each month in the quarter | 0.05 % to 0.10 % per month | Yes, sometimes removable |
| Turnover commission | Total debit movements over the quarter | 0.10 % to 0.25 % | Yes, often cappable |
| Sundry fees and charges | Packages, account maintenance, transactions | Variable | Partly |
Turnover commission hits the volume of debits, regardless of your cash position. A company that is never overdrawn and holds permanent surpluses still pays this commission on each of its payments. It is the line to look at first when cash is healthy.
Value dates, or the profitable lag
A cheque credited value date D+2, a transfer debited value date D−1: these lags appear nowhere as a cost, but they mechanically increase your debit balances, and therefore your interest.
For a company handling EUR 400,000 of movements a month with an average one-day lag and an overdraft at 5 %, the annual cost of the lag is around EUR 650. That is not enormous, but it is an entirely negotiable line, and its very existence is a good indicator of how old your terms are.
The five checks to run on the next statement
- Does the rate applied match the signed agreement? Configuration gaps between agreement and system are frequent and never correct themselves.
- Is the highest-overdraft commission capped relative to debit interest? A customary cap exists: without it, the commission can amount to several times the interest itself on an account that is lightly used but occasionally deeply overdrawn.
- Does turnover commission apply to internal transfers between your own accounts? This is the most common anomaly, and the easiest to have corrected.
- Are value dates in line with market practice and with what was negotiated, transaction type by transaction type?
- Do the packages billed correspond to services actually used? Options taken out when the account was opened often outlive the use that justified them.
Preparing a renegotiation that succeeds
A general request to reduce charges gets a general answer. A request backed by a quantified statement gets a negotiation. The preparation takes four steps.
- 1Rebuild twelve months of cost
The year's four interest statements, plus the fee statements. Total by billing line.
- 2Express it against volume
Total cost divided by the volume of movements. You get a cost in basis points, comparable from one bank to another — which the total in euros does not allow.
- 3Add the cost of FX
The FX margin paid on currency transactions belongs to the cost of the banking relationship, even though it appears on no invoice. In an international company it is often the largest line by value.
- 4Ask a competing institution for a quote
Not necessarily to switch, but to have an external reference. A renegotiation with no credible alternative is a conversation, not a negotiation.
In a company with regular international flows, the FX margin frequently exceeds all interest and commissions combined: unlike them, it is governed by no tariff schedule and can exceed 2 % depending on the product. A bank renegotiation that does not address FX leaves the largest line on the table.
The calendar
A renegotiation is prepared over a quarter and conducted at the start of the financial year, when banks are setting their commercial targets. A request made at year end, on a documented file and with a competing quote in hand, succeeds in a far higher proportion of cases than an improvised request mid-year.
Quantify the full cost of your banking relationship
The ELEGG review adds up interest, commissions and FX margins to give one figure, comparable and negotiable.
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Frequently asked questions
The questions finance departments ask most often on this topic
What is the highest-overdraft commission?
It is a commission calculated on the largest overdraft reached in each month of the quarter, regardless of how long it lasted. A single day at EUR 500,000 overdrawn triggers it at the same level as a permanent overdraft of the same amount. It is negotiable, and above all it can be capped relative to the quarter's debit interest.
Are value dates still applied to business accounts?
SEPA transfers fall under a strict regulatory framework governing credit and debit timing. Other transactions — cheque deposits, commercial paper, currency transactions — retain value-date lags that appear in the general terms and are part of the negotiable scope.
How do you compare two banking proposals objectively?
By expressing the total annual cost — interest, commissions, fixed fees and FX margin — against the volume of movements handled, in basis points. It is the only indicator comparable between institutions. Raw tariff schedules are not, because they are not weighted for your actual usage profile.
Is FX margin part of a bank negotiation?
It should be, and it is very often absent because it appears on no invoice. In a company with significant international flows it frequently exceeds all interest and commissions combined. Quantifying it is the precondition: a bank does not negotiate a line its client cannot measure.