Show TOC

Procedure documentationEditing the Interest Penalty Group Box

 

In the Interest Penalty group box on the Calculation tab page, you edit the fields for a condition that belong to amount category 105060 Interest 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 savings deposit account. You define the parameters such as the notice period, the allowance amount and the calculation method for the early withdrawal penalty in your application in Customizing for the product under the Notice on Amount attribute.

The interest penalty is calculated on the part of the amount withdrawn that is in excess of the permitted balance. The period for the calculation of an interest penalty is calculated with the calculation method for interest penalty.

You define interest penalty either as an interest rate or as a share of an interest amount that is calculated with a reference condition type.

Procedure

You can make the following settings:

  1. In the Condition Form field, you can enter the use for the condition.

  2. You can enter a reference condition type.

    If you enter a reference condition type, enter a percentage rate. You can then calculate the interest penalty as a share of the credit interest amount for the savings deposit account.

  3. If you enter a reference condition type, you can enter the following:

    • Use the Rounding Category and Rounding Unit fields to specify how the system rounds the resulting amounts for the interest penalty.

      For more information, see Rounding Numerical Values.

    • Enter an interest calculation method.

      If you have chosen the value actW / 252 in the Interest Calculation Method field, enter an interest calendar.

      For more information, see Interest Calculation Method.

    • You can enter a payment currency that differs from the condition currency.

      For more information about the dependencies of currencies in conditions, see Currencies in Conditions.

    • Enter a time unit for the interest rate to define the time unit to which the specified interest rate is to refer.

    • In the Interest Calculation field, enter whether you want to use linear or exponential interest calculation.

      If you enter the value Exponential, specify an interest settlement frequency.

      For more information, see Interest Calculation.

    • Enter a percentage rate or an interest reference.

    • You can enter absolute or relative markups or markdowns that refer to the reference interest rate.

      Example Example

      The three-month EURIBOR is 4.733 % on 11/03/2008.

      • You want to define an absolute markup of 2 % on the reference interest rate, so you enter 2.0. The system calculates the following interest rate: 4.733 + 2.0 = 6.733 %

      • You want to define an absolute markdown of 2 % on the reference interest rate, so you enter -2.0. The system calculates the following interest rate: 4.733 - 2.0 = 2.733 %

      • You want to define a relative markdown of 10 % of the reference interest rate, so you enter 90. The system calculates the following interest rate: 4.733 * 0.9 = 4.2597 %

      • You want to define a relative markup of 10 % of the reference interest rate, so you enter 110. The system calculates the following interest rate: 4.733 * 1.1 = 5.2063 %

      End of the example.

    • You can enter a minimum and a maximum interest that the system uses if the reference interest rate is greater or lesser than the minimum or maximum interest rate.

    • You can use a formula to calculate the percentage.

      For more information, see Formula Editor for Financial Mathematics.

  4. In the condition type Customizing of your application, in the Amount Category dialog structure, you can select the Amount-Based Reduction or the Percentage-Based Reduction checkboxes. This enables you to enter a reduction as an amount, percentage, or interest reference by which the system is to reduce the calculation basis of the interest amount.

    If you use both methods of reduction, the system first uses the percentage-based reduction and then the amount-based reduction.

    If you enter an interest reference reduction, you can specify a minimum or maximum percentage rate for the reduction.

Result

You have defined a penalty interest.

More Information

Amount Category 105060 Interest Penalty

Editing the Calculation Tab Page