Editing the Early Withdrawal Penalty Group Box
In the Early Withdrawal Penalty
group box on the Calculation
tab page, you edit the fields for a condition that belong to amount category 115070 Early Withdrawal Penalty
.
In this group box, you define compensation that the customer must pay the bank should she or he make an early withdrawal of funds from her or his time deposit account. The early withdrawal penalty is an interest amount that you can calculate differently according to the selected calculation method for early withdrawal penalties. You can also specify a fixed amount that is added to the early withdrawal penalty.
Procedure
You can make the following settings:
In the
Condition Form
field, you can enter the purpose of the condition.Use the
Rounding Category
andRounding Unit
fields to control how the system rounds the resulting amounts for the early withdrawal penalty.Enter a reference condition type.
The early withdrawal penalty always refers to the interest calculation of the hedged item, for example, the credit interest of the time deposit. You create the relationship of the hedged item condition by assigning a reference condition type. This reference condition type provides all the required parameters for the interest calculation such as the interest rate, interest calculation method, or the interest calculation type. The withdrawn amount is the calculation basis.
Enter one of the following calculation methods for the early withdrawal penalty:
If you enter interest calculation up to the withdrawal, you need to enter a percentage.
Interest is charged on the withdrawn amount at the interest rate in the reference condition type. This interest is calculated from the term start until the day of the early withdrawal, and multiplied by the percentage.
If you enter interest calculation until end of term, you need to enter a percentage.
The system calculates interest for the withdrawn amount using the interest rate of the reference condition type for the entire term and multiplies the result by the percentage.
If you enter interest calculation for the number of days, you need to enter a number of interest days.
Interest is charged for the amount withdrawn with the interest rate in the reference condition type and for the number of interest days.
You can also specify an amount that is added to the early withdrawal penalty.
If you enter an amount, you need to enter a currency in the condition header data. For more information about the dependencies of currencies in conditions, see Currencies in Conditions.
You can enter the following in the
Tiered or Interval Calculation
field.No scaled/interval calculation,
Tiered calculation
Mixed
You can enter the percentage or number of interest days and the amount for the early withdrawal penalty according to the amount withdrawn, and as a tiered or a mixed tiered/interval calculation.
Result
You have defined an early withdrawal penalty.
Example
A time deposit agreement is in the fixing phase of the first time deposit agreement and outside of the time deposit grace period. EUR 500.00 is withdrawn on 01/25/2005.
Term start |
12/31/2004 |
Term end |
03/31/2005 |
Amount |
EUR 5,000.00 |
Interest Calculation Method |
360/360 |
Interest Calculation |
Linear interest calculation |
Credit interest rate of the time deposit |
3 % |
Withdrawal amount |
EUR 500.00 |
Value Date of Withdrawal |
01/25/2005 |
You can make the following settings for the calculation of the early withdrawal penalty:
Enter interest calculation up to the withdrawal. The period from the term start until the value date of the withdrawal is 25 interest days.
You enter a percentage of 40% and an amount of EUR 5.00.
The resulting early withdrawal penalty is (500 x 0.03 x 25 x 0.40 / 360) + 5.00 = 5.42 EUR.
Enter interest calculation until end of term. The period from the term start until the term end is 90 interest days.
You enter a percentage of 40% and an amount of EUR 5.00.
The resulting early withdrawal penalty is (500 x 0.03 x 90 x 0.40 / 360) + 5.00 = 6.50 EUR.
Enter interest calculation for the number of days.
Enter 20 interest days and an amount of EUR 5.00.
The resulting early withdrawal penalty is (500 x 0.03 x 20 / 360 + 5.00 = 5.83 EUR.