A possible specification for Term Deposits in Mifos X

This document describes the new feature “Term Deposits” that is planned to be implemented in Mifos X.

Contents:

Term Deposits Overview

Interest Rate Charts

Interest Incentives

Term Deposits Product Definition

Interest Rate Chart Definition for Term Deposit

Interest Incentives for a specific band in the Interest Rate Chart for a Term Deposit

Term Deposit Creation

Term Deposit Approval

Term Deposit Closure at Maturity

Term Deposit Premature Closure

Term Deposit Re-invested at Maturity

Tasks for CodingDevelopment

1. Term Deposits Overview

Term Deposits are deposit accounts which are held for a fixed term – like 1 year, 2 years etc.

Typically, the term deposits would have the following features:

- A lock-in period – before which the deposit can be withdrawn

- Partial withdrawal not possible

- On Maturity, either the money (principal + interest) can be withdrawn, transferred to savings account or re-invested

- Usually will have a sliding interest rate chart (i.e. depending on various parameters like loan, gender, age etc, interest rates can vary)

- Interest is compounded on a certain period

- If withdrawn prior to maturity, there is a penal interest rate applicable (and the client may not get the interest rate that is applicable for that period)

2. Interest Rate Charts

An “Interest Rate Chart” defines an interest rate scheme that can be associated to a product. This will have a band (or range) of deposits periods/amounts and the associated interest rates applicable along with incentives for each band.

The interest rate chart will be maintained along with the creation of the term deposit product and is associated to the deposit product. For now, it will not be maintained independent of the deposit product. Logically, interest rate charts can be “attached” to different types of products like, Savings accounts, Term deposits, Recurring deposits etc.

Example:

S.No.	From	To	Interest Rate	Ladies Incentive	Senior Citizen Incentive	Description
1	1 month	12 months	9%	+0.5%	+0.5%	12 Months
2	13 months	18 months	9.50%	+0.5%	+0.5%	18 Months
3	19 months	24 months	11%	+0.5%	+0.5%	24 Months
4	25 months	36 months	12%	+0.5%	+0.5%	2-3 years
5	37 months	60 months	12.50%	+0.75%	+0.75%	3-5 years

The interest rates and the associated incentives need to be versioned with each change (or if maker-checker is enabled, then with each approval).

When a term deposit account is created, and an interest rate chart is associated to it, then internally, the current version of the interest rate chart is associated to the term deposit. This is not changed, even if the interest rate chart is later modified (i.e. when the term deposit is approved, an interest rate is associated to it. This interest rate for the specific term deposit is not modified even if the interest rate chart is later altered).

3. Interest Incentives

This feature in Mifos X will allow the operations manager to create interest incentive schemes applicable for a specific band in interest rate. For example,

a) Ladies get an additional 0.5% interest for deposits and senior citizens get an additional 0.5% interest for term deposits for periods upto 3 years.

b) Ladies get an additional 0.75% interest for deposits and senior citizens get an additional 0.75% interest for term deposits for periods greater than 3 years.

4. Term Deposits Product Definition

4.1 Term Deposit Definition

Data to be captured:

Field Name	Type	Priority Must – 1 Should – 2 Could – 3	Description	Validations / Notes
Name	Textbox	Must Have	Name of this Term Deposit product	100 chars Cannot be blank
Description	TextArea	Must Have	Description for this Term Deposit product	500 chars
Fund Source	Dropdown	Must Have	Source of funds for this product
Start Date and End Date	Dates	Must Have	Validity period for this product	Cannot be blank
Currency	Dropdown	Must Have	Currency in which this Term Deposit can be opened	Cannot be blank
Decimal Places	Numeric without decimals	Must Have	Number of Decimal Places that has to be used for computations and display for this currency	3 digits, numeric Cannot be blank, can be zero
In Multiples Of	Numeric without decimals	Must Have	Deposit can be accepted in multiple of 100’s, 1000’s etc.	10 digits, numeric
View/Edit Interest Rate Chart for this Term Deposit	Link	Could Have	Allows user to view / edit the interest rate chart that is applicable for this term deposit
Valid From and To	Read only text	Must Have	Displayed based on Interest Rate Chart selected. The Period within which the current date falls will be displayed.	Example: if today is 22^nd Nov 2013. And the interest rate chart has 3 tables related to different validity periods: a) 01-Jul-2013 to 31-Dec-2014 b) 01-Jan-2013 to 30-Jun-2013 c) 01-Jul-2012 to 31-Dec-2012 Then the dates for a) will be displayed
Interest Rate Chart	Read only table of interest rates and bands	Must Have	Table which has the interest rates applicable as of today.	Example: if today is 22^nd Nov 2013. And the interest rate chart has 3 tables related to different validity periods: d) 01-Jul-2013 to 31-Dec-2014 e) 01-Jan-2013 to 30-Jun-2013 f) 01-Jul-2012 to 31-Dec-2012 Then the interest rate chart for a) will be displayed
Interest Compounding Period	Dropdown	Must Have	Same as for Savings accounts	Cannot be blank or zero
Interest Posting Period	Dropdown	Must Have	Same as for Savings accounts	Cannot be blank or zero
Lock-In Period	Numeric without decimals With dropdown for Days/Months	Must Have	Same as for Savings accounts
For pre-mature Closures	Static Text	Must Have
Period when interest will not be paid	Checkbox	Must Have	If checked, then, if the deposit is prematurely closed within the specified period, then no interest will be paid
Period – From/To	2 text boxes - Numeric without decimals	Must Have	User can select applicable period range, for example: user enters 1 and 30, for “1 to 30 (days)”	Upto 5 digits allowed Has to be specified if “Period when interest will not be paid” is checked
Period Type	Dropdown	Must Have	User can select “Days” or “Months”	Has to be selected if “Period when interest will not be paid” is checked
Apply penal interest (less)	Checkbox	Must Have	If checked, then it means that there is a penal interest rate applicable if the account is closure before maturity
Penal Interest Rate	Numeric with 5 decimals	Must Have	Specifies, how much the interest rate will be reduced by because of this premature closure.	“1%” means 1% less than the interest rate applicable.
Penal Interest Rate Applicable On	Dropdown	Must Have	Specifies if the penal interest is applied on the interest rate for the whole term or applicable only for the interest rate that is applicable for the term till the time this deposit is being closed. Options available: a) Interest Rate Applicable for Whole Term b) Interest Rate Applicable for Term till Pre-mature Withdrawal	Example: if penal interest rate was 1%, For 0-6 months, interest rate is 4% For 6 to 12 months, interest rate is 5% If an account is opened for 9 months, and was closed at 4 months, then: For option a) – interest will be 4% (i.e. 5% minus 1%) For option b) – interest will be 3% (i.e. 4% - which is applicable for the 5 month term – minus 1)
Charges		Must Have	Same as for Savings accounts
Accounting		Must Have	Same as for Savings accounts

Sample Screen:

4.2 Interest Rate Chart Definition for Term Deposit

Data to be captured:

Field Name	Type	Priority Must – 1 Should – 2 Could – 3	Description	Validations / Notes
Interest Rate Chart for <product name>	Static Text	Must Have	“Interest Rate Chart for ” + term deposit product name	Product name came be underlined to highlight it. For example: “Interest Rate Chart for Fixed/Term Deposit - Scheme 1”
Add New Validity Period	Link	Must Have	Add a new section for capturing a new period of validity and the associated period/amount bands and associated interest rates
View Revisions	Link	Should Have	Clicking on this link will show the list of previous revisions made to this Interest Rate Chart.	The screen displayed on clicking this link will be the same as the Interest Rate Chart screen, except that in the “List of Interest Rate Charts” it will show the same Interest Rate Chart, with the available versions of it and the date of revision. The list will be displayed in descending order of date of revision. All other fields/functionality will be the same, except that the View Revisions Link will not be displayed and all fields will be in the read only mode.
Validity Period and associated Chart of Interest (period/amount bands and associated interest rates)	Section	Must Have	This section is displayed in descending order of “Valid From” dates.	This section can be repeated multiple times. At least 1 has to exist, if save is to be allowed. There cannot be overlaps between periods.
Chart of Interest	Table	Must Have	See below fields and screen shot
S.No.	Static Text	Must Have	Running sequence number
Period Type	Dropdown	Must Have	User can select “Days” or “Months”	Has to be selected
Period – From/To	2 text boxes - Numeric without decimals	Must Have	User can select applicable period range, for example: user enters 1 and 30, for “1 to 30 (days)”	Upto 5 digits allowed Either, Period Range or Amount Range or Both can be specified. Both Period Range and Amount Range cannot be blank.
Amount Range	2 text boxes - Numeric without decimals	Must Have	User can select applicable amount range, for example: user enters 0 and 10,000,000, for “0 to 10 million (rupees)” – which is the standard limit defined by central bank norms	Upto 12 digits allowed Either, Period Range or Amount Range or Both can be specified. Both Period Range and Amount Range cannot be blank.
Interest %	Numeric with decimals	Must Have	Interest rate applicable for this “band” (“band” is a period and the associated amount range)	4 digits before and 5 digits after decimal point allowed. Cannot be blank, but can be zero.
Description	Textbox	Must Have	Description for this “band”	Upto 50 chars. Cannot be blank.
Incentive field(s)	Multiple columns	Should Have	The customer or account attributes that were selected in the “Interest Incentive” screen is displayed as header. The value displayed under this column will be	To edit the values for this field, click on “Incentives” link (or icon).
Delete	Link or Icon	Must Have	Will remove this band.	User is asked for confirmation (popup with yes or now) before this band is removed from screen.
Incentives	Link or Icon	Must Have	Takes user to the “Interest Incentive” screen where user can specify the incentives that are applicable for this band.
Add Row	Link or Icon	Must Have	Adds a new “band” row
Save Button for the screen	Button	Must Have	If new Interest Rate Chart, will save this internally as “Version 1”. If an existing Interest Rate Chart, then the existing version will not be modified internally, but a new “Version Number” is generated and the interest rate chart is stored against this.

Sample Screen:

4.3 Interest Incentives for a specific band in the Interest Rate Chart for a Term Deposit

This screen will only be invoked from the Interest Rate Chart screen. It will be invoked for a specific band within a validity period in the Interest Rate Chart.

This screen will have 2 sections:

a) Customer Attributes – to specify the interest incentives based on Customer Attributes (like gender / age)

b) Account Attributes – to specify the interest incentives based on Account Attributes (like an additional 0.5 interest for loans approved in the month of Jan)

Data to be captured:

Field Name	Type	Priority Must – 1 Should – 2 Could – 3	Description	Validations / Notes
Title line	Static Text	Must Have	Displayed based on the Interest Rate Chart product name/validity period and the “band” description. Concatenation of the following fields: Term Deposit Product àName Interest Rate Chart à A specific Validity Period A specific Band à Description
Customer Attributes		Must Have
Drop down of customer attributes	Dropdown	Must Have	For now, have Gender and Age. Later it should be possible to add other attributes too	Has to be selected. Note: Gender needs to be added as a standard attribute for Personal Customers in the Client screens
Drop down of condition	Dropdown	Must Have	Will have the following values = - Equals != - Not Equals < - Is Less Than > - Is Greater Tha	Has to be selected.
Comparison Value	Dropdown or Text box (depending on the type of the Customer Attribute)	Must Have	If dropdown, then same as the values for Customer Attribute selected. Else, user enters value	If text box, max length 150.
Fixed Interest (%)	Textbox - Numeric with decimals	Must Have	Interest rate applicable for customer with this attribute having this comparison value.	4 digits before and 5 digits after decimal point allowed. Cannot be blank, but can be zero. Either “Fixed Interest (%)” or “Incentive Interest (%)” can be specified. Both cannot be specified at the same time and both cannot be blank.
Incentive Interest (%)	Textbox - Numeric with decimals	Must Have	Additional Interest rate applicable for customer with this attribute having this comparison value.	Plus symbol (+) following by 4 digits before and 5 digits after decimal point allowed. Cannot be blank, but can be zero. Either “Fixed Interest (%)” or “Incentive Interest (%)” can be specified. Both cannot be specified at the same time and both cannot be blank.
Add Row	Link or Icon	Must Have	Adds a row for additional Customer attributes for specifying interest incentives
Account Attributes		Could Have	Similar functionality as customer attributes, except that drop down will have account specific attributes (like open date, approved date etc.)
Save button	Button	Must Have		One possible implementation: Save does not save to database, but is temporarily saved to the Interest Rate Chart screen. This data is saved only when Interest Rate Chart is saved.

Sample Screen:

5. Term Deposit Account Creation

During the Term Deposit Account Creation process, user will not be able to alter the interest rate that is applicable or the penal interest rates section.

Depending on the date of application, amount and deposit period, the interest rate that is applicable (from the relevant Interest Rate Chart) will be displayed on the screen.

Data to be captured:

Field Name	Type	Priority Must – 1 Should – 2 Could – 3	Description	Validations / Notes
Client Name	Static Text	Must Have	Displayed for the customer for whom this account is being opened
Term Deposit Product	Dropdown	Must Have	User can select the term deposit product.	Only Term deposit products are listed in the drop down
Loan Officer	Dropdown	Must Have	Same functionality as Savings Account
Submitted On	Date	Must Have	Same functionality as Savings Account
Amount	Textbox – Numeric without decimals	Must Have	Amount deposited by this customer as term deposit	12 digits max length
Deposit Period	Textbox – Numeric without decimals with drop down to select period type	Must Have	Period for which the above amount is deposited by this customer as term deposit. The period type drop down will have Days, Months, Years	5 digits max length
Currency, Decimal Places and In Multiples Of		Must Have	Same functionality as Savings Account
Current Interest Rate Chart	Read Only Table	Must Have	This section displayed based on Interest Rate Chart applicable for this product (based on submitted date, Mifos X displays only table for the currently applicable period) The band that is applicable (for the amount and deposit period) will be highlighted in a different color in the Interest Rate Chart. (with the above values, 2nd band will behighlighted - 31-90 days)	Cannot be changed by user
Pre-mature Closure Penalties	Link/Icon		Displays the penalties associated to this account/product	Cannot be changed by user
Interest Compounding Period, Interest Posting Period, Lock-In Period		Must Have	Same functionality as Savings Account
On Maturity/Closure	Dropdown	Should Have	a) Allow Withdrawal by Cash – will allow cash withdrawal only b) Transfer to Savings Account – automatically transferred to the specified savings account c) Re-invest (with same product/period) – automatically create new deposit account with the principal + interest for the same period and for the interest rate that is currently applicable (not the same interest that this account was opened with) d) Await User/Client Decision	History needs to be maintained. In case a new account is opened, system needs to maintain a link with the old account so that user can navigate from old account to new account (or vice-versa) The facility for navigation needs to be added to the view page for this account.
Transfer to Savings	Dropdown	Should Have	Dropdown of all savings accounts for this customer	This field is applicable and enabled only if “On Maturity” is selected as “Transfer to Savings Account”
For pre-mature Closures	Static Text	Must Have		Read-only section for premature closure conditions.
Period when interest will not be paid	Checkbox	Must Have	If checked, then, if the deposit is prematurely closed within the specified period, then no interest will be paid	Read-only section for premature closure conditions.
Period – From/To	2 text boxes - Numeric without decimals	Must Have	User can select applicable period range, for example: user enters 1 and 30, for “1 to 30 (days)”	Read-only section for premature closure conditions.
Period Type	Dropdown	Must Have	User can select “Days” or “Months”	Read-only section for premature closure conditions. Has to be selected if “Period when interest will not be paid” is checked
Apply penal interest (less)	Checkbox	Must Have	If checked, then it means that there is a penal interest rate applicable if the account is closure before maturity	Read-only section for premature closure conditions.
Penal Interest Rate	Numeric with 5 decimals	Must Have	Specifies, how much the interest rate will be reduced by because of this premature closure.	Read-only section for premature closure conditions. “1%” means 1% less than the interest rate applicable.
Penal Interest Rate Applicable On	Dropdown	Must Have	Specifies if the penal interest is applied on the interest rate for the whole term or applicable only for the interest rate that is applicable for the term till the time this deposit is being closed. Options available: c) Interest Rate Applicable for Whole Term d) Interest Rate Applicable for Term till Pre-mature Withdrawal	Read-only section for premature closure conditions.
Charges		Must Have	Same functionality as Savings Account
Accounting		Must Have	Same functionality as Savings Account

Sample Screen:

6. Term Deposit Approval

Same functionality as that is present for Savings Accounts

7. Term Deposit Closure at Maturity

At Maturity (after the deposit term is completed), when “Close” action is invoked, then this screen is displayed.

Data to be captured:

Field Name	Type	Priority Must – 1 Should – 2 Could – 3	Description	aut
Transaction Date	Date with Date Picker	Must Have	Date when this account is being closed
Amount	Amount with decimals	Must Have	Automatically computed and displayed by Mifos. This is the maturity amount.	Read-only field
Action	Dropdown	Must Have	Specifies how the balance in this term deposit is being given to client: a) Withdrawn by Payment Type – i.e. cash, cheque etc. b) Transferred to Savings Account c) Renew Term Deposit – on submission should take to the Create Term Deposit Account screen with the amount automatically filled with the maturity amount
Transfer To Savings Account	Dropdown	Must Have	Shows list of savings account that is owned by this client. If only 1 savings account is present, this this will be auto-selected.	This field is enabled only when Action is selected as “Transferred to Savings Account”
Closure Notes	Textarea	Should have	Any comments that user wishes to enter when closing this account
Payment Type			Same as what is present in Withdrawal functionality
Payment Details			Same as what is present in Withdrawal functionality
Save	Button		If Renew Term Deposit is selected, then this account should be closed only after the new account is created and not before it.

Sample Screen:

8. Term Deposit Premature Closure

Before Maturity (prior to the completion of the deposit term), when “Close” action is invoked, then this screen is displayed.

When a fixed deposit is prematurely closed, the functionality is same as closure at maturity except that:

a) Amount will be different – as the period is different and hence interest will be applicable for a lower period. Also, if there is a penal interest applicable, then the interest will be lower.

b) The rule using which the interest is computed is displayed to the user

c) Under Action dropdown, Renewal option will not be available

Data to be captured:

Field Name	Type	Priority Must – 1 Should – 2 Could – 3	Description	aut
All fields the same as “Term Deposit Closure at Maturity”
Amount	Amount with decimals	Must Have	Automatically computed and displayed by Mifos. This is the amount + interest computed for the relevant period – less any penal interest that is applicable	Read-only field
Interest Computation Rule	Dynamic Text	Must Have	Displayed based on the premature interest rates applicable as configured for the product.	For example: Interest Rate For Pre-mature Closure: [4%] Rule: Less [1%] On ["Interest Rate Applicable for Term Till Pre-mature Withdrawal"] Values is shown in square braces are variables dynamically displayed based on the product definition
Action	Dropdown	Must Have	Specifies how the balance in this term deposit is being given to client: a) Withdrawn by Payment Type – i.e. cash, cheque etc. b) Transferred to Savings Account	There will be no option to renew the field

Sample Screen:

9. Term Deposit Re-Investment at Maturity

See above under “Term Deposit Closure at Maturity”

10. Tasks for Coding/Development

Possible sequence in which development tasks can be taken up

10.1 Creation/Maintenance of Term Deposits with Interest Rate Charts and maintenance (without incentives) – without versioning

10.2 Interest application (daily batch job)

10.3 Term Deposit Closure at Maturity with interest computation

10.4 Term Deposits Re-investment at Maturity

10.5 Term Deposits Pre-mature Closure with interest and penal interest computation

10.6 Creation/Maintenance of Term Deposits with Interest Rate Charts with Interest Incentives

10.7 Interest application (daily batch job) with interest incentives

10.8 Show versions for Interest Rate Charts

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