How to calculate interest on Instant Access Savings?
Revolut accrues and pays you interest on your savings balance daily. However, as per Italian tax laws, we're required to withhold 26% taxes and remit them to local tax authorities.
Interest accrues daily, but if your net interest is less than 0.01 in the corresponding savings currency, it won't be paid until the cumulative interest exceeds this amount.
For more details about the tax on your Instant Access Savings, read this FAQ or the Instant Access Savings terms on our website.
Interest and tax calculation example
Consider a balance of €1,000 with a 2.5% gross annual interest rate, compounded daily, and subject to 26% tax withholding:
Day 2
- Interest accrued: €1,000 * 2.50%/365 = €0.0684932
- Payable interest: €0.06 (remaining keeps accruing until it becomes €0.01)
- Tax accrued: €0.0156
- Tax withheld: €0.01 (remaining keeps accruing until it becomes €0.01)
- Interest paid after tax: €0.06 - €0.01 = €0.05
- New balance: €1,000 + €0.05 = €1,000.05
Day 3
- Interest accrued: €1,000.05 * 2.50%/365 = €0.0684966
- Payable interest: €0.06 + €0.01 = €0.07 (considering interests accrued on days 1 and 2)
- Tax accrued: €0.0182
- Tax withheld: €0.01 + €0.01 = €0.02 (considering tax accrued on days 1 and 2)
- Net Interest paid: €0.07 - €0.02 = €0.05
- New balance: €1,000.10