KRS 355.4A-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:

(a) By agreement of the sender and receiving bank; or

(b) By a funds-transfer system rule if the p ayment 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 (1), 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 three

hundred sixty (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 receiv ing 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.