verzinst

Verzinst is a Dutch financial term used to indicate that interest has been added to the principal. As an adjective, verzinst describes a financial amount that already includes accrued interest, rather than merely the original principal. The concept is used in banking, lending, and accounting to distinguish between the nominal principal and the total balance that is due or credited after interest accrues up to a given date. In contracts and statements, a balance may be labeled as verzinst when the interest for the period has been capitalized, i.e., added to the balance, rather than paid out separately.

Calculation and usage: The exact method depends on the contract or accounting policy. When interest is capitalized (added to the principal), the balance becomes verzinst. When interest is paid out separately and not added to the principal, the balance may be described as not verzinst or as a balance with ordinary accrued interest that has not been capitalized. The term is commonly encountered in loan agreements, deposit accounts, and financial statements to indicate that the reported amount already includes earned interest.

Examples: A loan of 1,000 euros at an annual rate of 5% that is capitalized after one year results in a verzinst balance of 1,050 euros. If the interest is not capitalized, the balance would be described differently, with the accrued interest shown separately.

See also: rente, rente op rekening, contante rente, accreditieve accounting.