Related Tables

meetings, recur_on_day, recurrence_detail - two entries get created per savings offering, 1. for period of interest calculation 2. freq of interest posting
prd_offering - one entry for every product offering creation.
prd_offering_meeting - two entries which maps a savings product offering to two meeting created in "meeting" table.
savings_offerings - contains the savings product offering specific information

account - contains core account information for savings account
savings_account - contains savings specific information
savings_performance - contains details of total deposits, total withdrawals, total_interest, missed_deposits

savings_activity_details - contains details about deposit, withdrawn, interest posted and adjustments (the entries from this table are shown on the UI "View Savings Activity Details")
account_payment -

account_trxn -
savings_trxn_detail -
savings_schedule -

NOTES: About editing Savings products

• On every edit operation new entries gets created in meeting tables, those should get updated not created again.
• Start Date (Start Date for and Active product can not be edited so it should be read only like GL Code)
• "View Change logs" seems to be working correctly for all the editable fields in "Edit Savings Product Offering"

Savings Matrix

1. Group Model (with Individual Tracking/Accountability): Center and Group (per individual mode)
2. Group Model (with no Individual Tracking/Accountability): Group (Complete Group mode)
3. Individual Model: Client

Interest Calculation and Posting

Introduction

When creating a SavingsProduct, the user can define how interest calucation and posting will happen.

Mifos out-of-the-box currently supports two types of interest calculation; Average Balance and Minimum Balance.

The user may also choose from two types of time period for interest calculation; Days and Months

For interest posting, only Months are supported.

Interest Calculation

At present interest calculation is carried out by an overnight batch job (SavingsIntCalcTask). It determines when to run based on the next interest calculation date value stored in savings_account -> next_int_calc_date datable table/column.

When a savings account goes active for the first time, an initial next calculation date is determine based on the start of the fiscal year which is fixed at January 1st and the interest calculation time period chosen in the savings account product definition. For interest calculation, this can be Daily (e.g. every x days) or Monthly at the end of the month (e.g. every x months on last day of month).

So interest is only calculated for any transactions that occur within a given 'interest calculation period'. The interest calculated for a given period is stored (savings_account -> int_to_be_posted) until the next interest posting date is reached whereby the sum of all calculated interest is posted to the savings account.

Interest Calculation Dates in Months

Example:

Interest calculation is determined every 3 months so based on starting from Fiscal start of year, the valid interest calculation dates are:

Jan-01 to Mar-31

Apr-01 to Jun-30

July-01 to Sep-30

Oct-01 to Dec-31

Interest Calculation Dates in Days

Interest calculation is determined every 28 days (4 weeks) so based on starting from Fiscal start of year, the valid interest calculation dates are:

Fri Jan-01 to Fri Jan 29
Sat Jan-30 to Fri Feb 26
..
..

Interest Posting

Interest posting always occurs on a monthly basis on the last day of the month.

When interest is due for posting, its takes the value from (savings_account -> int_to_be_posted) and posts it the date of last day of month.

Interest posting is handled overnight by batch job (SavingsIntPostingTask).

Interest Posting Dates in Months

Interest calculation is determined every 1 months so based on starting from Fiscal start of year, the valid interest posting dates are:

Jan-01 to Jan-31

Feb-01 to Feb-28/29

Mar-01 to Mar-31
..
..
Dec-01 to Dec-31

Interest Calculation Formula

Interest Calculation Examples

The purpose of these interest caluclation example is to describe by example how savings work in mifos. From reading through these, you should be able to understand

1. How and when dates for interest calucation and posting are determined
2. How the Average Balance algorithm works
3. How the Minimum Balance algorithm works
4. How and when interest is calculated for a given Interest Calculation Period
5. How and when interest is posted to a savings account

see Interest Calculation For Average Balance By Example
see Interest Calculation For Minimum Balance By Example

For each the average and minimum balance examples below we will use the same savings product definition:

Average Balance Example

Savings Account Created

Account Opened on 19 July 2010.

Savings Account Activated

Account Activated on 20 July 2010.

Possible Interest Calculation and Posting Dates

Actual Interest Calculation and Posting Dates based on Account Activation

The account goes active on 20 July 2010

Savings Account Transactions - First Non Zero Balance Transaction (Deposit/Withdrawal)

On 25th of July, a deposit of 1000 is made. No other activity occurs on the account which results in the account state looking like below.

As a result, on midnight of 31 July 2010 - 1 Aug 2010, the savings interest calculation batch will run and calculate interest for this account.

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.

Savings Account Transactions (deposit/withdrawal)

There is no activity as the account rolls into August but a deposit is made on the 10th of August and a withdrawal near the end on the 30th of August. This leaves the account looking like this before interest calculation runs again on 31st of August.

Calculated interest from this period, 11.10 is added to previously calculated interest (1.64) resulting in 12.74 interest for July and August. The interest is still not compounded.

Which results in account looking like the following for August.

Savings Account Transactions (interest posting and no interest calculation for failing to reach minimum balance)

Again, there is little activity in September but for a deposit and withdrawal but interest is due to be calculated and compounded at the end of the month.

First of all interest is calculated for the period.

Next the interest that is due to be posted is posted to account (12.74) and this value is reset to zero, next interest calculation and posting dates are also updated making the end of month account look like.

Savings Account Transactions (adjustments or back-dated transactions)

The account at the start of october looks like the following:

There is no activity in October except for an adjustment of a previous transaction. (At present mifos only allows adjustment of the very last transaction so we will adjust the withdrawal transaction). Instead of withdrawing 500 on 25th of September, it should of being Zero.

So september account really looks like this now:

And as a result of this Septembers interest calculation should of being:

As a result Septembers closing balance and octobers opening balance should look like this:

Savings Account Closed

Minimum Balance Example

Savings Account Created

Savings Account Activated

Savings Account Transactions (deposit/withdrawal)

Savings Account Transactions (interest calculation/posting)

Savings Account Transactions (adjustments)

Savings Account Closed

Average Balance Interest Calculation (for activities given above)

July Calculation,

the balance was opened on 20^th but first activity was made on 25^th, so 25^th will be the day from which the interest calculation will start.

For duration of July interest calculation interval we are going to exclude 25 July as the deposit was made on that day.

Using Above given formulas

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)

August Calculation,

Using Above given formulas

P (Aug) = ((1000 *  10) + (1500 * 20) + (500 * 1)) / 31 = (10000 + 30000 + 500) / 31 = 40500 / 31 ( >= 1000)

r (Aug) = (10 / 100)  * (31 / 365) = 31 / 3650

I (Aug) = P (r) = 40500 / 31 * (31 / 3650) = 11.10

September Calculation,

Using Above given formulas

P (Sept) = ((500 *  15) + (1500 * 10) + (1000 * 5)) / 30 = (7500 + 15000 + 5000) / 30 = 27500  / 30 ( is not >= 1000) so not interest should be calculated

r (Sept) = (10 / 100)  * (30 / 365) = 3 / 365

I (Sept) = P (r) = 0 because of minimum balance condition

Total interest to be posted on 1 Oct midnight = 1.64 + 11.10 + 0 = 12.74

Minimum Balance Interest Calculation (for activities given above)

Interest Calculation/Posting (Notes)

Interest Calculation Date: SAVINGS_ACCOUNT.LAST_INT_CALC_DATE (fromDate), SAVINGS_ACCOUNT.NEXT_INT_CALC_DATE(toDate)

Interest Posting Date: SAVINGS_ACCOUNT.LAST_INT_POST_DATE, SAVINGS_ACCOUNT.NEXT_INT_POST_DATE

Based on the interest calculation meeting from Savings Product Offering "next interest calculation date" is set during interest calculation.

The interest calculation is done for the period determined by fromDate and toDate.

Initial (first) interest calculation has LAST_INT_CALC_DATE as null, in this case the activation date account is taken as fromDate.

Interest calculation takes place when the NEXT_INT_CALC_DATE is older than currentDate.

Interest calculation takes place when principal (P) is greater or equal to the Minimum balance required for interest calculation(Savings Product has property miniBalForIntCalc)

Calculated interest is saved in SavingsBO.interestToBePosted field after every interest calculation. 

e.g. if there interest calculation period is 1 month and posting frequency is 3 month then the interest will be calculated 3 times and stored in SavingsBO.interestToBePosted. Interest Posting Batch job will pick the interest from SavingsBO.interestToBePosted.

 This makes a necessary condition that Interest calculation batch job should always run before interest posting batch job.

 If one interest calculation fails interest posting job has no way to determine and it will still post the interest as SavingsBO.interestToBePosted which could be zero if interest calculation job fails.

Savings Schedules (Notes)

- While creating Mandatory Savings Product, you can not enter a zero amount for "Recommended amount for deposit at every meeting". But during creation of Savings Account it allows to enter zero as "Recommended amount for deposit at every meeting" which results in zero amount schedule. The transaction gets recorded for that zero due, this is probably not a bug, but it can be improved. Same situation is for Voluntary Savings Account