Indiana Code 5-13-9-8. Service charges; consideration in computing interest rate; payment by direct charge or from interest earned; reporting by political subdivision
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Sec. 8. Any investing officer of a political subdivision that makes a deposit in any deposit or other account may be required to pay a service charge to the depository in which the funds are deposited, if the depository requires all customers to pay the charge for providing that service. However, the service charge imposed must be considered in the computation of the interest rate for determining which depositories are entitled to investments as prescribed by sections 4 and 5 of this chapter. If the total service charge cannot be computed before the investment, the investing officer shall estimate the service charge and adjust the interest rate based on this estimate. The service charge may be paid:
(2) in a manner that subtracts the service charge from interest earned on the funds in the deposit or other account.
(1) by direct charge to the deposit or other account; or
Terms Used In Indiana Code 5-13-9-8
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
If the manner described in subdivision (2) is used to pay the service charge, the political subdivision must report the net interest deposited in the political subdivision’s financial records, and the political subdivision is not required to report the amount of the service charge subtracted in the political subdivision’s financial records.
As added by P.L.19-1987, SEC.11. Amended by P.L.18-1996, SEC.20; P.L.147-2011, SEC.1; P.L.202-2011, SEC.1; P.L.233-2015, SEC.11.