What is p.a and how is it different from EBKM?
p.a. stands for 'per annum', and refers to the interest rate applied on your daily balance, with the assumption that interest is compounded daily. For example, if you maintain a constant balance of 1,000 HUF in your account for a year with a p.a. rate of 2.50%, compounded daily, then your balance increase over the year would include the interest earned on your initial deposit, as well as the interest earned on any previous interest added to your account balance. Assuming a 15% tax withholding at source, let's calculate the balance after three days using the given example:
Day 1: 1,000 HUF
Day 2: 1,000 HUF + (1,000 HUF X 2.50%/365) - 15% = 1000.06 HUF
Day 3: 1000.06 HUF + (1,000.06 HUF X 2.50%/365) - 15%) = 1,000.1 HUF
EBKM quoted on 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. For instance, if you deposit 100,000 HUF on Day 1 in a Savings Account providing gross interest at 2.5% p.a, then the EBKM value will be 2.50%.