This blog was co-authored by Eric Geldenhuys, candidate attorney at Norton Rose Fulbright South Africa

The Daily Cumulative Compounded Rate (CCR) means the interest rate that is calculated at the end of the interest period. This single interest rate is applied for the whole interest period. The daily fluctuations are reduced over the calculation period of CCR in contrast to the calculation of the Daily Non-Cumulative Rate (NCCR). However, complexities will arise if intra-period events occur such as events of default, early repayments, and secondary trading.

The NCCR means that a daily interest amount is calculated by subtracting the CCR of the previous day from the current CCR. A daily interest amount enables and supports intra-period events.