Title: Message Title
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Should we consider this as two different types of deposit products?
a) Term Deposits or Fixed Deposits - will not allow partial withdrawals or additional deposits. These kind of deposits would have the sliding interest rate capability
b) Savings Accounts or Demand Deposits - will allow partial withdrawals and additional deposits whenever needed. The comment by Sunil Mundra is relevant for these type of deposits - where it needs to be specified if interest will be calculated based on:
- minimum of daily-EOD-balances during the period OR
- average of daily-balances during the period
(are there any other balance needed? for example, balance "as on 11th day of the month")
My preference would be to have two separate products (rather than trying to overload the savings product with the term deposit features). The products admin screen would have 2 different sets of links for Savings deposits and Term deposits.
OR
We could have the product be called as "Deposits" (instead of Savings) and a new field "Deposit Type" field which will have 2 values:
a) Savings/Demand Deposit
b) Term Deposit
Savings/Demand Deposits will need to specify if interest will be calculated based on:
- minimum of daily-EOD-balances during the period OR
- average of daily-balances during the period
and other fields related to term deposits will be disabled.
Term deposits would not need this to be specified, but will have the following additional features:
a) sliding interest rates based on the account attributes
- Amount ranges and / Or
- term ranges
b) "additional interest" rules can also be set:
- Based on client attributes like age, sex etc. examples,
If senior citizen (i.e. client's age > 60), then give additional 0.5% interest
if female, then give additional 0.5% interest
Mifos X could allow multiple rules (attributes) to be selected from a dropdown and to specify the additional interest rates applicable (i.e. in the above example, a female client above 60 years will get 1% additional interest)
c) "interest penalty" rules can also be set:
- Based on time of withdrawal, examples:
If withdrawn within 7 days, zero interest
If withdrawn within 3 months, 2% less than offered interest rate
If withdrawn within 6 months, 1.5% less than offered interest rate
If withdrawn before maturity, 1% less than offered interest rate
Is there a requirement to have a sliding interest rates for pure Savings accounts too? I have not seen many requirements for this. However, if this feature is really needed, then we need to be clear on the handling of certain situations:
Example: for 5,000 to 10,000 balance, interest is 5%
for 10,001 to 15,000 balance interest is 5.5%
and interest is computed monthly and applied monthly.
During the first 10 days of the month, balance was 9,000 and for the rest of the month, balance was 11,000. How will interest be computed?
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