Bank Guarantee Commission Calculator

Work out bank guarantee commission instantly with clear inputs, formula shown and shareable results.

About Bank Guarantee Commission Calculator

Guarantee commission is charged on value for the tenor, rounded up to whole quarters, with a minimum charge for small or short guarantees. Because the rounding is upward, a thirteen-month guarantee is billed for five quarters.

Formula

Guarantee commission

Commission = max(value × rate × quarters × 3/12, minimum charge)

Worked example

With the default values below, Bank Guarantee Commission Calculator returns Total Commission Payable of $750,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Guarantee Valueminimum 0: 25,000,000
Commission Rate Per Annumaccepts 0–6 %: 1.5 %
Tenor In Monthsaccepts 1–120: 24
Minimum Commissionminimum 0: 2,500

Results

Total Commission Payable: $750,000.00
Quarters Billed: 8
Annualised Commission Cost: $375,000.00
Commission As Share Of Guarantee Value: 3.0000%

Step by step

1Values used
2Guarantee commission
3Total Commission Payable= 750,000.00
4Quarters Billed= 8
5Annualised Commission Cost= 375,000.00
6Commission As Share Of Guarantee Value= 3.0000

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or compounding frequency into account.
Figures are rounded for display to 4 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.

Frequently Asked Questions

Why round to quarters?

It is a long-standing billing convention that also compensates the bank for the administrative cost of short guarantees.

Is commission refunded on early release?

Sometimes pro rata, but only after the original instrument is returned and the beneficiary confirms cancellation.