The prescribed rate of interest is 11.50% per annum with effect from 1 November 2024. The previous rate was 11.75% per annum. According to the Prescribed Rate of Interest Act, interest on debts where no rate is prescribed is calculated at the repo rate plus 3.5%. The prescribed rate of interest applies to all debts unless a different rate is set by law, by trade custom or by agreement between the parties. The parties can therefore avoid the application of the prescribed rate by agreeing to a different interest rate, subject to other applicable laws such as the National Credit Act which may limit the amount of interest that can be charged.
When the Reserve Bank changes the repo rate a new prescribed rate of interest becomes effective from the first day of the second month following the month of the new repo rate announcement. The applicable rate of interest for a debt is the rate that is in effect at the time when the interest begins to run. That rate will continue to apply even if the prescribed rate of interest changes at a later date.
Do not look for a Government Gazette notice. Gazetting the change is not a requirement and such notices are not always published on time, or at all, by the Minister.
Outdated versions of this blog remain on the internet. For the latest rate always go to Blogs | Global law firm | Norton Rose Fulbright and search for Prescribed rate of interest.
Here is a table of the changes in the prescribed rate since 1993 (note: there was no change in 2021):
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Read the original publication at Norton Rose Fulbright
