Abhishek Chaudhary created FINERACT-3017:
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Summary: Overdraft-enabled savings with an interest receivable
mapping earn interest for overdrawn days
Key: FINERACT-3017
URL: https://issues.apache.org/jira/browse/FINERACT-3017
Project: Apache Fineract
Issue Type: Bug
Components: Savings
Affects Versions: 1.16.1
Reporter: Abhishek Chaudhary
When a savings product allows overdraft and has an Interest Receivable GL
account mapped,
{{SavingsAccountInterestPostingServiceImpl.calculateInterestUsing}} builds two
posting periods for each posting interval: one for the days the account is in
credit and one for the days it is overdrawn.
{{CompoundInterestHelper.calculateInterestForAllPostingPeriods}} then treats
them as consecutive periods and carries the interest of the days in credit into
the overdrawn days of the same interval, although that interest is only posted
at the end of the interval.
So for the month an account goes from credit into overdraft, it earns savings
interest on a balance it never had, and the overdraft interest it owes is not
charged. Without the Interest Receivable mapping the same account gets the
correct amount, so the interest depends on a GL mapping.
*Example*
Monthly posting and compounding, daily balance, 365 days, 10% nominal rate, 21%
overdraft rate, overdraft limit 10,000.
# Activate on 02 August 2021 and deposit 10,000.
# Withdraw 10,010 on 09 August 2021 (overdrawn by 10 from 9 to 31 August).
# Run *Post Interest For Savings* on 02 September 2021.
* Without an Interest Receivable mapping, August is posted as 19.05: 19.18 for
the 7 days in credit, less 0.13 overdraft interest on -10 for 23 days.
* With the mapping, August is posted as 19.18 plus a second interest posting of
0.06. The 19.18 is carried into the overdrawn days, so they are calculated on
+9.18 instead of -10. No overdraft interest is posted.
With a 0% overdraft rate the overdrawn days still produce that second interest
posting (0.0578 with 4 decimals). It showed up in the accrual integration test
of FINERACT-2909 (PR #6761).
*Expected*
The two periods of one interval should not compound into each other. August
should be posted as 19.18 interest for the days in credit and 0.13 overdraft
interest, the same 19.05 in total as without the mapping.
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