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| title | Savings Account Activation Info |
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When an account goes active (for the first time) several things happen. - account activation date is set.
- The next interest calculation date is determined - in this case as interest calculation occurs every 1 months on end of month, the valid set of interest calculation dates are highlight in the table below.
- The next interest posting date is determined - in this case, occurs every 3 months on end of month, the valid set of interest posting dates highlighted below beside the possible interest calculation dates
- It is only through interest posting that interest is actually compounded on the account.
- Schedules are generated with mandatory/recommend amounts to track payments by group/individual clients.
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Possible Interest Calculation and Posting Dates
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| title | Calculation periods where first deposit occurs are handled is slightly special way. |
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Strictly speaking, the 'calculation period' is monthly so is from 1st of July to 31st of July 2010. However the account was only created on the 19th of July. - The 'average balance' is NOT calculated from the account creation date - 19 July 2010.
- The 'average balance' is NOT calculated from the account activation date - 20 July 2010.
- The 'average balance' is calculated from the first day of activity that results in a non-zero balance which is - 25 July 2010.
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| title | Average balance worked out for july |
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Given the average balance equation shown above: Starting from 25th of July: - 25th of July to 31st July = 6 days duration (not including the 25th itself)
- 25th of July to 31st July = 1000 balance for duration
- P (July) = (1000 * (25 to 31 July) / (25 to 31 July) =(1000 * 6) / 6 = 1000 (since the P >= 1000, interest should be calculated)
- r (July) = interest / 100 * (25 to 31 July) / (Number of Days in current financial year) = (10 / 100) * (6 / 365) = 6 / 3650
- I (July) = P (r) = 1000 (6 / 3650) = 1.64 (rounding up to 2 decimal)
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This interest is not posted (as its not due to be posted) but is instead stored in a interest to be posted column on savings_account. The next interest calculation date is upated to end of 1 month from last (Aug 31 2010) leaving the account looking like the following for July.
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