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A typical scenario is that the deposit account reaches the maturity date and the customer withdraws their deposit amount and accrued interest which effectively closes the deposit account.
Use-case: Full withdrawal and pre-closure of deposit account
Some deposit accounts allow for the customer to withdraw thier money in full from the account earlier than the maturity date but the result of this is heavy penalization. This is known as pre-closure. On pre-closure the interest accured to date is calculate from the closure date (length of time money was in deposit account), pre-closure interest rate and the original deposit amount.
Use-case: Renewing or 'Rolling over' a Deposit Account
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- Deposit amount: The amount deposited might be the originial deposit again or the entire amount received from previous deposit account.
- Term: It will remain same as the original deposit term.
- Record it as a renewal: We should record that this deposit account is a renewal from a pre-existing deposit account (probably best to track the deposit account id it is a renewal of.)
- Interest Rate: MFI / Bank may give different interest rate based on the market offerings during the renew period.
Use-case: Full withdrawal and pre-closure of deposit account
Some deposit accounts allow for the customer to withdraw thier money in full from the account earlier than the maturity date but the result of this is heavy penalization. This is known as pre-closure. On pre-closure the interest accured to date is calculate from the closure date (length of time money was in deposit account), pre-closure interest rate and the original deposit amount.
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Typically customers can avail a loan by seeking the FD as a collateral. If customer wish to withdraw partially then loan product can be offered.
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Interest Pay-out (Simple Interest Type): Financial institutions also offers to pay the monthly realised interest component to its members as cash / cheque on monthly or quarterly based on the interest payout frequency selected for the FD Product.
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