1. What is Cash Advance Interest?

Cash advance interest is the fee charged by RBC for borrowing money against your savings account. It's calculated based on your outstanding balance and the annual interest rate, then divided by 12 to get the monthly interest amount.

2. How Does the Calculator Work?

The calculator uses the cash advance interest formula:

Where:

• \( Balance \) — Outstanding cash advance amount in CAD
• \( Rate \) — Annual interest rate percentage

Explanation: The formula calculates the monthly interest by converting the annual rate to a monthly rate and applying it to the outstanding balance.

3. Importance of Interest Calculation

Details: Understanding cash advance interest helps you manage debt more effectively, plan repayments, and avoid unexpected charges on your RBC savings account.

4. Using the Calculator

Tips: Enter your cash advance balance in CAD and the annual interest rate percentage. Both values must be positive numbers to calculate the monthly interest.

5. Frequently Asked Questions (FAQ)

Q1: How often is cash advance interest charged?
A: RBC typically charges cash advance interest monthly, calculated on your average daily balance.

Q2: Are there additional fees for cash advances?
A: Yes, RBC may charge additional transaction fees for cash advances beyond the interest calculated here.

Q3: How can I minimize cash advance interest?
A: Pay off your cash advance balance as quickly as possible to minimize interest charges.

Q4: Is cash advance interest tax deductible?
A: Generally, personal cash advance interest is not tax deductible in Canada. Consult a tax professional for specific advice.

Q5: How does this differ from regular savings interest?
A: Cash advance interest is what you pay to borrow money, while savings interest is what you earn on deposited funds.