Carolina Cloud pays SOFR on unused prepaid credits

# Interest on Prepaid Credits Source: [https://docs.carolinacloud.io/organizations/prepaid-interest/](https://docs.carolinacloud.io/organizations/prepaid-interest/) Your organization’s**prepaid credits**earn interest\. We pay a SOFR\-referenced rate, compounded daily, on the real\-money balance an admin has purchased — the same way a bank pays interest on a deposit\. Idle prepaid credit isn’t dead money: it grows until you spend it\. Interest is paid**only on prepaid credits**— the balance you bought \(see[Prepaid Credits](https://docs.carolinacloud.io/organizations/prepaid-credits/)\)\. Free[trial/promo credits](https://docs.carolinacloud.io/organizations/overview/#the-concept)never earn interest, which is one of the reasons the two buckets are tracked separately\. The rate tracks**SOFR**\(the Secured Overnight Financing Rate\), the benchmark overnight interest rate published every business day by the Federal Reserve Bank of New York\. By default we pay**the full SOFR rate**— no spread skimmed off — which typically beats what a bank pays on a comparable deposit, since banks usually pay SOFR*minus*a margin\. - The interest you earn is itself added to your prepaid balance, so it’s fully spendable on compute and storage like any other prepaid credit\. - The applied rate is never negative\. If the reference rate ever went below zero, your interest simply stops at 0 — your balance is never reduced by interest\. ## How it’s calculated [Section titled “How it’s calculated”](https://docs.carolinacloud.io/organizations/prepaid-interest/#how-its-calculated) We follow the standard bank/market convention so the numbers are auditable and reproducible: - **Daily accrual on an ACT/360 day\-count\.**Each day’s interest is`balance × \(annual rate ÷ 100\) × \(1 ÷ 360\)`\. SOFR is quoted on a 360\-day year, so we use 360\. - **Daily compounding\.**Interest is capitalized into your prepaid balance every day, so the next day’s interest is calculated on the slightly larger balance\. Over a year this makes the**effective annual yield \(APY\)**a touch higher than the headline rate\. - **Weekends and holidays are covered\.**SOFR only publishes on business days, so each non\-business day accrues using the most recently published rate\. Friday’s rate carries through Saturday and Sunday automatically — you earn interest every calendar day\. - **Banker’s rounding**to the cent \(8 decimal places\), so accrual is effectively exact and never drifts\. **Illustrative example\.**With SOFR at 4\.31% and a $10,000 prepaid balance, you’d earn roughly`$10,000 × 4\.31% × \(1 ÷ 360\) ≈ $1\.20`on the first day, then a hair more each following day as it compounds — about**$440 over a year**\(≈4\.40% APY\) if the rate held steady\. The actual figure moves with SOFR\. Every organization with a prepaid balance above zero earns interest automatically\. There’s no opt\-in, no minimum term, and no minimum balance beyond having prepaid credit on the books\. Spend the balance down and accrual simply scales with whatever is left; top it up and the larger balance earns more the very next day\. Interest figures appear on the**My Organization**page \(sidebar →**Usage & Billing**→**My Organization**\), alongside your trial/prepaid balance breakdown: - **Interest earned to date**— the lifetime total credited to this org\. - **Current rate and APY**— the annual rate we’re paying right now and its daily\-compounded effective yield\. - **The SOFR rate it’s based on**, and the date that rate is effective for\. Every day’s accrual is recorded twice: as a durable ledger row \(one per organization per day\) and as a tamper\-evident entry on the**billing**audit stream\. Each record captures the principal it was computed on, the exact SOFR rate and its effective date, the applied annual rate, the day’s interest, and the resulting balance — so any single dollar of interest can be traced back to the published benchmark that produced it\.