I notice on my business's Ethekwini Metro Bill that I've received a credit for "interest on deposit" - which has been allocated against the deposit held. At 21.6% of the current value of the deposit held, it seems quite generous. Of course that would be ignoring that the account is many years old and it's the first time I've ever received any interest on the deposit.

Suspecting something's up, I've gone hunting for info. What I've found is cause for thought.

A search on ethekwini municipality interest on deposit produces quite a few municipal documents that seem to span a number of years. And yes, it seems there has been a significant recent change.

A document dated March 3, 2012 here indicates the following:

4.2.4 Interest Payable on Cash Deposits

Interest on cash deposits held, shall accrue 6 months from date of deposit at a rate of
3% per annum simple interest as determined by the Chief Financial Officer from time
to time. The deposit, plus interest accrued, shall be taken into account upon closure or
termination of an account or paid annually against the customers account if requested.

A more recent document dated March 31, 2016 here named Credit Control and Debt Collection Policy 2016-2017 has this to say:

4.14 Interest Payable on Cash Deposits

The Municipality will not pay interest on cash deposits. Any interest accruing on
existing deposits in accordance with a determination made by the Municipality,
prior to the Effective Date, will cease from the Effective Date. All interest that
has accrued up to the Effective Date will be added to the deposit held by the
Municipality. The deposit plus interest accrued, shall be taken into account upon
closure or termination of an account.

I take it the effective date has come and gone, and the metro has now processed the transaction. And the criminally low interest that used to accrue has now been reduced to zero.

Obviously all of this gives rise to quite a few potential talking points. The one I'm kinda curious about first is -

Quite clearly there's a lot of money in play here in Ethekwini Metro alone. Just imagine how much is in play in deposits across the country!
How is interest on these deposits being handled elsewhere?