Interest capitalization
Under interest capitalization is understood in the banking system , the attribution of unused interest on capital , from which they were calculated, and their subsequent return as capital component.
General
In German law and in banking, a strict distinction must be made between capital and interest (agreed interest: § 246 BGB, statutory interest: § 247 BGB). Interest is the result of the return on capital, but is shown separately from capital. However, this special identification changes with the capitalization. According to Section 248 (2) of the German Civil Code (BGB), it is only permitted for credit institutions and according to Section 355 of the German Commercial Code for current accounts . Otherwise, capitalization is prohibited ( Anatocism ; Section 248 (1) BGB), because this would generally allow the calculation of compound interest .
For the capitalization it does not matter whether the calculated interest from investors or creditors or used in zero bond before they get paid. In terms of procedural law, interest is deemed to be ancillary claims within the meaning of Section 4 Paragraph 1 Clause 2 ZPO. According to the Federal Court of Justice (BGH), the fact that they were combined with the main claim to form a single claim amount does not change the quality of (mere) secondary claims.
Account types
Capitalization issues are most common with savings accounts . In this case, the interest on savings deposits is usually credited to the savings account at the end of the calendar year (on December 31 ), but the credit does not automatically add to the capital component. They are not capitalized until 2 months after they have been credited, so that they can be used without notice within this period without charging advance interest. In the case of quarterly financial statements for current accounts , capitalization can take place at the end of the quarter, but also not until the end of the year, depending on the regulation in the GTC . If debit interest accrues on current accounts , they will also earn interest together with the balance from the time of capitalization .
Capitalization time
The interest capitalization can take place at the beginning of a period (in advance ) or at the end (in advance ). How long this period is is stipulated in the contract. An annual interest capitalization at the end of the year , for example, is common for savings . The time of capitalization is the time specified in the General Terms and Conditions at which the debit and credit interest incurred become part of the capital, are lost in the balance and earn interest with it. From the time of capitalization on, it is no longer possible to withdraw the interest concerned from savings accounts without interest or notice. Capitalization creates - depending on the account balance - a compound interest effect that increases assets or debts or reduces assets or debts. In the balance sheet, capitalization is the conversion of an interest claim into a capital claim or an interest liability into a loan liability.
Tax aspects
The date of receipt of the credit on an account is deemed to be the inflow date in the sense of the inflow principle in accordance with Section 11 (1 ) EStG . The power of disposal over interest is usually obtained when the payment has been made. If the interest is credited to an account, tax liability begins. Since the interest capitalization of savings accounts, for example, only takes place after the interest has been credited, the point in time of the interest capitalization is not decisive for the occurrence of tax liability. Interest earned on savings deposits at the beginning of the year count towards the previous year in economic terms, even if they are only entered in the savings book later.
Individual evidence
- ^ Max Lüscher-Marty, Fundamentals of Financial Mathematics / Statistics , 2010
- ^ BGH, judgment of November 25, 2004, Az .: III ZR 325/03
- ↑ Deutsche Postbank AG, Conditions for Savings Transactions , Section 6 No. 4 (page 6) ( Memento of the original from May 18, 2015 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ BFH judgment of July 26, 1983, Az .: VIII R 30/82, BStBl II 1983, 755
- ↑ BFH judgment of 3 June 1975, Az .: VIII R 156/71, BStBl II 1975, 696
