Interest Compensation

Product Group which is a beneficiary of the Bundle.

Offset type determines if Interest Compensation should act as a regular notional pool or offset only the donor balance against the recipient balance. The options available are:

• Recipient or Blank
  • The balances of the donors contribute to the recipient arrangement and adjust the recipient balance for interest calculation.
  • The offset percentage input in Max Offset % is applied only on the recipient account balance. The default option is blank.
• Pool
  • The balances in the pool of accounts are grouped as credit and debit balances and offset against each other subject to a Max Offset %.
  • This feature is currently available only for the Accounts Product Groups. This means the accounts can be notionally pooled to have a pool debit balance which can be offset with a pool debit balance (subject to a Max Offset %) and the interest is calculated on the balances after the offset.

Property which would act as a beneficiary in the Bundle.

Maximum percentage of recipient balance that can be offset by donation.

Donor Product Group that contributes to Bundle.

Property under the given Product Group that contributes to Bundle. More than one property can be attached

Allows the user to specify the balance that contribute to the calculation. Example: Debit balance or Credit balance.

Specify the Balance Type for interest calculation. A valid record in AA.SOURCE.CALC.TYPE (for example, CURBALANCE).

Accrual calculation of donors can be Suppress or Calculate or Information only.

• Calculate – Indicates that the system continues to accrue interest at the individual donor level also.
• Suppress – Indicates that the accruals should be stopped for the properties (as specified in the Interest Property attribute), at the individual donor level.
• Info Only – Indicates that the accruals should be stopped for the properties (as specified in the Interest Property attribute), at the individual Donor level. However, interest is accrued and stored as Info accrual in the AA.INTEREST.ACCRUALS. This is for information purpose and the property won’t have an actual accrual of interest.

The Balance Netting Pool Structure offering can be in different flavors.

• Multi-Currency Credit Facility - Shared Limit with Allow Netting enabled and all the CT accounts are connected to this Limit
• Single Currency Credit Facility - Single Limit for each CT account
• Single Currency Facility - No Credit Facility

Consequently, it leads to different ways in which the financial institution calculates interest.

• All Interest at MA level (all interest calculated at MA level and posted to the CT nominated as the recipient of the Bundle Interest Compensation)
• Penalty Interest alone at MA level (Penalty Interest calculated at MA level using Interest Compensation and all other interest calculated and posted at individual CT Account level)
• No Interest at MA Level (all interest calculated and posted at individual CT Account level)

This can be setup as three different variations of Interest Compensation condition. If the choice of variation is a user selection at the Bundle Arrangement level, then the Eligibility rules pertaining to each of these variations could be defined namesake.

At the Product Designer level, the Default Variation can be set as ‘Not Available’ indicating that it is available as only one of these three variations.