What Is Cost of Funds?

Cost of funds is an optional feature of the ADB system that calculates the percent you are making on savings accounts or spending on loan accounts. This percentage is generated each time Cost of Funds (AD191) is run for all ADB accounts that have a defined interest account or total name.

While all ADB companies will want to determine an ADB account's average daily balance, the cost of funds calculation is only used by companies that need to calculate the amount of interest paid on loans or earned on investments.

The following calculation is used to determine cost of funds.