N.Y. Uniform Commercial Code Law § 4-a-506: Rate of Interest

Section 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.