Introduction to Deposits

This module allows banks to change a deposit from maturity to rollover and vice-versa and also to change the term, rate and interest schedule after rollover.

Reinvestment Instructions for Term Deposit

Temenos Transact allows banks to update the rollover condition like changing the subsequent term. The rollover activity is scheduled using the change product arrangement condition in a deposit arrangement.

This functionality allows banks to capture the information related to the deposit reinvestment instructions and to change a deposit from maturity to rollover and vice versa. It allows users to define a new term, new rate and new interest schedule after the rollover.

The term deposit term on roll-over feature is used to provide a new term to be applied upon reinvestment, as part of the maturity instructions. When the user enters the next rollover term in a placeholder field, it will get updated in the deposit just after the upcoming rollover.

The term deposit interest rate on roll-over feature is used to provide a new interest rate within x-days of maturity, to be applied, upon re-investment, as part of the maturity instructions. When the user enters a next rollover interest rate in a placeholder field, it will get updated in the deposit just after the upcoming rollover.

The system will validate whether the change in the payment frequency and the payment method (CAPITIALISE (compounding) or PAY (non-compounding)) is within the period mentioned in the XNZ.ADDITIONAL.INFO.STAND.DOWN.PERIOD. The system allows the change if it is done within the stand-down period.

The system will do the validation with respect to the new rollover interest rate. The new rollover interest rate is updated at the arrangement level on the day of rollover. The new rollover interest rate could be the Negotiated Rate value or a Periodic Index Rate (carded rate).

Calculate the Break-Cost Interest on Full and Partial Breaks

This functionality allows banks to calculate the break costs on full and partial breaks when a customer requests for an early withdrawal in term deposits.

When a customer requests for an early withdrawal in term deposits which is called TD break, the bank will pay interest on the break amount from the start date to date of the payment at a discounted rate. The accrued interest on the break principal amount will be capitalised at the time of break.

The difference of the interest already capitalised or paid to the customer at the original effective rate and the calculated interest at the discounted rate will be recovered as the break cost. The bank can modify the calculated break cost. If any tax is applicable on the break cost, it will be recovered. The break can be partial or full.

The remaining principal and its related components will have the balances as if the amount was deposited on the start date and continuing till the maturity date.

The following items have been introduced as part of this functionality:

• The NZDEPO.PARAMETER parameter application has been introduced to define the bank business rules based on which the term deposit break will be applied. A parameter version (NZDEPO.PARAMETER,INPUT) and its authorisation version (NZDEPO.PARAMETER,AUTH) have also been introduced.
• The NZDEPO.BREAK.DETAILS application has been introduced to store the multiple break details of a deposit arrangement. The NZDEPO.BREAK.DETAILS,INPUT version allows users to input the term deposit break details.
• The NZDEPO.TD.BREAK.REQUEST.UNAUTH enquiry allows users to view, delete or authorise records created in the NZDEPO.BREAK.DETAILS application.
• The NZDEPO.TD.BREAK.REQUEST enquiry has been created to display the break details of a deposit arrangement.
• New API’s have been introduced to create or retrieve the information about term deposit redemptions requested and executed.