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 Amount Category 115070 Early Withdrawal Penalty

Use

You use this amount category to represent an early withdrawal penalty that is due if an early withdrawal is made from a time deposit account, which the customer pays as compensation to the bank.

The early withdrawal penalty debited to the customer can be one of the following:

  • A charge amount

  • A combination of an interest amount and a charge amount

  • An interest amount that can be calculated differently dependent on the calculation method for the interest penalty.

    • Interest for Number of Days : The agreed interest rate fort he underlying transaction, such as the time deposit agreement, is calculated for a specific number of days and billed as compensation.

    • Previous Interest Amount: A specific percentage of the interest accrued up to the current time for the underlying transaction is billed as compensation.

    • Total Interest Amount : A specific percentage of the interest accrued for the whole period fort he underlying transaction is billed as compensation.

You have the following options when editing a condition with the amount category 115070 (early withdrawal penalty) .

  • You can enter an amount in the Amount field, which are debited as an early withdrawal charge to the customer.

  • If you want to enter an early withdrawal penalty for credit interest, you must use the input help to enter a reference condition type . The system only displays condition types of the credit interest amount category.

    • Select a calculation method for early withdrawal penalty . Dependent on the chosen calculation method for early withdrawal penalty , you must enter a percentage or a number of interest days .

    • You can also enter a fixed amount so that the early withdrawal penalty is a combination of charge and interest.

  • You can define tiered calculation. You can define an amount or percentage for the lower limit of the tier. For more information, see Editing Tiered and Interval Conditions .

Example

A time deposit agreement is in the fixing phase of the first time deposit agreement and outside of the time deposit grace period.

Start of Term

01/01/2005

End of Term

03/31/2005

Amount

EUR 5,000

Interest calculation method

365/365

Int. Rate

3%

Withdrawal amount

EUR 500

Value Date of Withdrawal

01/25/2005

  • If you choose Interest for Number of Days as the calculation method for the early withdrawal penalty, then the early withdrawal penalty is calculated based on the balance at the value date and the interest rate defined in the time deposit agreement for a fixed number of days.

    Enter EUR 3.00 in the Amount field. Enter 20 as the Number of Days .

    The resulting early withdrawal penalty is 8.22 + 3.00 = 11.22 EUR.

  • If you choose Previous Interest Amount as the calculation method for the early withdrawal penalty, then the early withdrawal penalty is calculated as a percentage of the interest accrued between the start of term for the time deposit agreement and the value date of the withdrawal.

    Enter 40% in the Percentage field and EUR 5.00 in the Amount field.

    The resulting early withdrawal penalty is (0.40 * 10.27) + 5.00 = 9.10 EUR.

  • If you choose Total Interest Amount as the calculation method for the early withdrawal penalty, then the early withdrawal penalty is calculated as a percentage of the interest accrued between the start of term for the time deposit agreement and end of term of the time deposit agreement.

    Enter 15 % in the Percentage field and EUR 5.00 in the Amount field.

    The resulting early withdrawal penalty is (0.15 * 36.99) + 10.00 = 15.55 EUR.