New York Laws
Part 5 - Miscellaneous Provisions
4-A-506 - Rate of Interest.

(1) If, under this Article, a receiving bank is obliged to pay
interest with respect to a payment order issued to the bank, the amount
payable may be determined (i) by agreement of the sender and receiving
bank, or (ii) by a funds-transfer system rule if the payment order is
transmitted through a funds-transfer system.
(2) If the amount of interest is not determined by an agreement or
rule as stated in subsection (l), the amount is calculated by
multiplying the applicable Federal Funds rate by the amount on which
interest is payable, and then multiplying the product by the number of
days for which interest is payable. The applicable Federal Funds rate is
the average of the Federal Funds rates published by the Federal Reserve
Bank of New York for each of the days for which interest is payable
divided by 360. The Federal Funds rate for any day on which a published
rate is not available is the same as the published rate for the next
preceding day for which there is a published rate. If a receiving bank
that accepted a payment order is required to refund payment to the
sender of the order because the funds transfer was not completed, but
the failure to complete was not due to any fault by the bank, the
interest payable is reduced by a percentage equal to the reserve
requirement on deposits of the receiving bank.

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