Banker’s Rounding

We use banker’s rounding for dividend payments and trade settlements.  This is how it works:

If the digit in the thousandths place (i.e., the third digit to the right of the decimal point) is:

1. less than 5 (i.e., 1, 2, 3 and 4); the penny (i.e., the second digit to the right of the decimal point) will remain unchanged (i.e., standard rounding down). For instance, 1.114 will be rounded down to 1.11.

2. more than 5 (i.e., 6, 7, 8 and 9), the penny (i.e., the second digit to the right of the decimal point) will be increased by 1 (i.e., standard rounding up).  As an example, 1.116 will be rounded up to 1.12.

3. is exactly 5, the penny (i.e., the second digit to the right of the decimal point) will be adjusted as follows:

3.1 if the penny is an even number, it will be left unchanged.  For example, 1.125 will be rounded to 1.12 (since 2 is an even number, it will not be changed).

3.2 if the penny is an odd number, it will be rounded up to an even number.  For example, 1.115 will be rounded to 1.12 (since 1 is an odd number, it will be rounded up to 2).