The second deposit product type is the Savings Product.
The savings product defines the features and settings of the savings accounts a financial institution wishes to offer its clients. The product serves as a framework for defining all savings accounts within it; parameters set in the savings product are applicable to all accounts created under that particular product.
The following are the required steps to take to create a Savings Product:
- Select Savings Product on the Product page
- Next, click on the Create button at the top-right of the page.
- Provide the required Details and currency information.
Enter a product name relevant to your product. A product name should be easy to identify or connect with the purpose of your savings. This makes it easy for users within your organization to identify the product.
Woodcore supports a variety of currencies for the saving product. You can create and manage customers' savings accounts using any currency of your customers' choosing. The currency list is added during the onboarding process. See the Setup and Configuration page for more information.
The short name is usually an abbreviation of the product name. For example, a Flex Naira product name can be named FN. However, you can add any short name which is easy for your organization to identify.
The product descriptions cover detailed information about the product. This product field is optional. However, it is essential as it gives users within your organization an overview of the product. Therefore, ensure all relevant details are contained in the description field.
- Enter the terms you wish to set for the fixed deposit product.
Nominal annual interest refers to the interest rate your clients earn over a period of time, in this case, annually. For example, 4% nominal annual interest. Your clients earn this rate yearly at the end of an interest cycle.
The compounding period is the interval between the time interest is paid and the next interest payment period.
The available compounding period options on the console include Daily, Monthly, Quarterly, Semi-Annual, and Annually. Select any of these periods.
When creating a savings product, you can define the duration from the date of the initial posting to the closing date of the interest payment.
The Woodcore console supports Monthly, Quarterly, Biannually, and Annually.
The interest accrued in an account can be calculated using:
Average Daily Balance: Here, Woodcore calculates your customer's average balance using the total balance during the day and the daily interest based on the amount.
Minimum Daily Balance: Woodcore calculates your customer's minimum balance using the total balance during the day and the daily interest based on the amount.
Days in the Year depend on your financial days in a year of practice.
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.
You can determine the minimum amount the customer is to deposit in other to open a savings product. The amount provided at the time of new savings application submission gets deposited into the savings account once it is activated.
You can set a lock-in period. Withdrawal will not be allowed within the selected period.
The available duration option for the Lock-in period includes, Days, Weeks, Months, and Years.
Withdrawal fees are charges added by your organization which are taken at the withdrawal of savings amount under a specific savings product.
Check the check box to enable Withdrawal fee for transfers for a product.
The minimum balance is the minimum amount a customer must have in an account to receive benefits such as interest. In an instance where the available balance is below the provided minimum balance for calculation, interest will not get generated.
Enforce the minimum balance for a savings product by clicking the check box and enter the minimum balance you intend to set for an account.
As deposits and withdrawals are made on an account, the balance will fluctuate between two postings of interest. You can choose the amount interest should be calculated based on. Withdrawals below the provided amount will not be possible.
- Lastly, checking the box enables savings accounts connected to the savings products to have an overdraft.
You have the option to allow overdrafts. By this, all accounts created under this product can withdraw beyond zero, which means the balance can be negative up to a particular limit specified when the account was created.
Enabling the overdraft opens up a form requiring more information such as:
The Maximum Overdraft Limit is the account's maximum negative balance. No withdrawals will be permitted beyond the limit. You will be able to create an overdraft for your clients for any amount up to the maximum amount stated when creating new accounts under this product.
Interest is subject to withholding tax. Whether or not tax is payable is often determined by the kind of tax rate, the minimum taxable amount, or the minimum amount of tax payable.
Select a tax group which is usually created during the initial setup and configuration
Enabling dormancy tracking measures the number of customers that are not using your product in a given time period.
- Enter the required Charges & Accounting details.
To add charges, you should have already defined it in the Charges. Select any of the defined charges from the drop-down menu.
By default, Accounting will be disabled. By clicking the None checkbox, automatic journal posting will be disabled. This implies that all transactions carried out within this product will require manual entry in your organization's Charts of Accounts.
On the other hand, to enable automated journal posting, select the Cash on the checkbox and enter the GL accounts for posting. See Linking GL to financial activities for more information.
An accounting rule enables your organization to add a particular guideline or setting for accounts. For example, developing guidelines for how to handle any transactions that affect General Ledger (GL) balances in two distinct branches.
- Click on the Show button to enable Advanced Accounting Rule.
- Click on the Add button, to display a drop-down menu.
Configure Fund sources for Payment Channels.
For Example, in the image shown above, the Payment type, Cheque is mapped to the Fund source - a Bank. So whenever payment type is used for the transaction, a Journal entry for Account - Bank will be passed.
A preview will be displayed with all the details. It is important to carefully review for any errors. Once you are sure the details are correct, you can click the Submit button to create a savings product.
Updated 4 months ago