How to calculate interest on Savings Accounts
Interest accrues daily, but if net interest is less than 0.01 in the corresponding savings currency, it won't be paid until the cumulative interest exceeds this amount. A 15% withholding tax will be deducted from interest before it is credited to your Savings account, as required by Lithuanian law.
The Unified Deposit Interest Rate Indicator (EBKM) quoted in the Revolut app and the Deposit Information Sheet has been calculated using the gross rate (i.e. a rate before the Lithuanian withholding tax) and a maturity period of 30 days.
Consider a balance of HUF 1,000 with a 2.5% annual interest rate, compounded daily, with a 15% withholding tax applied:
Day 2
- Interest accrued: 1,000 * 2.50%/365 = HUF 0.0684932
- Payable interest: HUF 0.06 (remaining keeps accruing until it becomes 0.01)
- Tax accrued: 0.06 * 15% = HUF 0.009
- Tax withheld: HUF 0 (remaining accruing until it becomes 0.01)
- Interest paid after tax: HUF 0.06
- New balance: 1,000 + 0.06 = HUF 1,000.06
Day 3
- Interest accrued: 1,000.06 * 2.50%/365 = HUF 0.0684973
- Payable interest: 0.06 + 0.01 = HUF 0.07 (considering interests accrued)
- Tax accrued: 0.07 * 15% = HUF 0.0105
- Tax withheld: HUF 0.01 (considering tax accrued)
- Interest paid after tax: 0.07 - 0.01 = HUF 0.06
- New balance: 1,000.06 + 0.06 = HUF 1,000.12
Changes since Revolut's Hungarian branch launch
Revolut has opened a Hungarian branch, with customer accounts being moved to the new branch over the coming weeks. Savings accounts are now handled by the Hungarian branch instead of the Lithuanian entity.
For existing Savings accounts, some changes to taxation apply as a result of our new branch. Accounts that haven't been moved yet have 15% tax deducted on savings interest as mandated by Lithuanian law, with taxes reported and remitted to Lithuanian authorities.
However, after your account is moved to the new branch, this'll change to a 28% tax deduction on any interest before it's credited to your Savings account, as required by Hungarian law. This includes a 15% withholding tax (PIT) and a 13% social tax, which we'll report to Hungarian tax authorities.