The Fixed Deposit Product is one of Woodcore’s deposit product types. It defines the settings and parameters of the type of fixed deposits a financial institution wishes to offer its customers. The product serves as a template for multiple fixed deposit accounts of a financial institution. Therefore, you can categorize, and sort fixed deposit accounts by adding them to a product, and these accounts will have the features and properties set in that product.
To create a Fixed Deposit product:
- Select Fixed deposit products in the Product page.
- Next, click on the Create button at the top right of the screen
Fields marked with asterisks (*) are mandatory.
- Provide the required Details and currency information.
For the fields on this page:
- Product Name : It is important that the Product Name should be easily identifiable or connected with the purpose of the deposit. This makes it easy for users within your organization to identify the product.
- Short Name: Add a brief and easily recognizable name or acronym to refer to the product.
- Currency: Woodcore supports a range of currencies. Select the currency applicable to the product.
- Description: Add a description of the product.
Click on the Next button to move to the next page.
- Enter the terms you wish to set for the fixed deposit product.
In this section, you are required to:
- Default Deposit Amount: This pre-determined amount is set by the financial institution as the deposit requirement for opening a fixed deposit account.
- Minimum and Maximum Deposit Amount: The minimum and maximum deposit amount refer to the range of amounts a customer can deposit when opening a fixed deposit account under this product. The Minimum deposit amount is the lowest amount that a customer can deposit to open the account, while the Maximum deposit amount is the highest amount that can be deposited.
- Interest Compounding Periods: Select the frequency at which the interest earned on a fixed deposit account is calculated and added to the principal amount. Available options include Daily, Monthly, Quarterly, Semi-Annual, and Annually.
- Interest Posting Periods: Select the frequency at which interest should be added to the account. Available options include Monthly, Quarterly, Bi-Annual, and Annually.
- Interest Calculated Using: Select the method used to calculate the interest earned on a fixed deposit account.
- Daily Balance: Here, the interest is calculated on the balance in the account each day. The interest earned is added to the account at the end of each day, and the calculation is based on the balance at the end of that day.
- Average Daily Balance: The interest will be calculated on the average balance in the account each day.
- Days in the Year - Depending on your financial days in a year configuration.
Available options are 365 Days and 360 Days.
These terms covered in this section do not automatically apply to all customers' accounts under this product.
- Enter the required Settings details.
Here, you are required to:
- Provide a Lock-In Period for each account. During this period, the customer's deposit cannot be withdrawn. The lock-in period can be set in Days, Weeks, Months, and Years. Example: Where 12 months is selected as the lock-in period, the customer will not be able to make any withdrawals during this time.
- Minimum and Maximum Deposit Term: Select the minimum and maximum duration for which the deposit will be held without any withdrawals.
- In Multiples of: The lock-in period is calculated in multiples of a certain duration, such as days, weeks or months, or years.
- For Premature Closure: Any withdrawal made within the lock-in period will attract a penal interest for premature closure. The check box also allows you set the penal interest. Also, provide the Percentage - penalty for premature closure.
- Lastly, select Is Withhold Tax Applicable: Based on your organization's tax configuration, you can withhold taxes on interest earned from fixed deposits. Ensurre tax configuration has already been set up.
- Provide the required Interest rate information.
The required details include:
- Valid from date: Select a start datefor the Interest rate chart.
- The End Date where you want to stop the provided interest rates for the chart.
The available duration options are Days, Weeks, Months, and Years.
Lastly, provide the Rate of Interest for the period.
- Enter the required Charges & Accounting details.
- To use the Add Charge feature, you should have already defined it in charges. Select the defined charges from the drop-down.
By default, Accounting will be disabled.
- Next, click on None if you are using this product for various transactions like deposits, withdrawals, etc. These transactions are not passed in the journal entry.
Enabling Accounting for the savings product:
You should have created a chart of accounts,
To enable Accounting, you need to select cash accounting.
Map accounts with respect to the savings product accounts.
Advanced Accounting Rule
- On clicking on the show button, to view the accounting rule that can be added. Click on the Add button to add the accounting rule you wish to apply to the product.
A preview containing all the details of your Fixed product will be displayed. Ensure you go through the preview to check for errors.
- Click on the Submit button to save and create a new Fixed Deposit product.
Updated 10 months ago