This article provides an overview of how to create Fixed Interest Rules. Fixed Interest Rules tell the system how to compute interest on a deposit that is held on a transaction.
Interest Processing Settings via System Default tab of Company Profile
- Interest Type (Fixed) – ensure there is no check in appropriate box
- Initiate the flag labelled “Number of Interest Calculation Base Days are affected by Leap Year” if the current year is a leap year.
- Deposit Interest Check To: make your selection based on your companies Office Policies and Procedures.
To enter the Fixed Interest Rules, go to File Maintenance / Fixed Interest Rules, click on New and complete details as required.
- Rule Name – this should be a unique name to identify the rule.
- Interest Earned Rate – by clicking the lookup button to the left of this percentage field, the Interest Rate Manager window will be displayed as noted below and you will complete as required. The Effective Date is the date that the interest calculation will be based on, for example, if you enter 2% with an effective date of January 1st, 2018 – then all interest calculations will be based on 2% for all deposits entered after January 1, 2018. Once completed select Save and close the window.
- Interest Paid Rate – enter the percentage you will pay the Buyer as disclosed in the Agreement of Purchase and Sale and/or other legal documentation relating to the sale of this property.
- Process Fee – enter the numeric value as disclosed in the Agreement of Purchase and Sale and/or other legal documentation relating to the sale of this property.
You may enter as many Interest Rules as required, one for last years transactions, one for G.I.C./Term Deposit, etc.
Editing/Deleting a Fixed Interest Rule
If you wish to modify a Fixed Interest Rule, select this option from File Maintenance. Highlight Fixed Interest Rule and click the Edit button. Make the desired changes and click the Save button.
To delete a Rule, highlight the Rule and click the Delete button. The warning screen will pop up to confirm your decision. Select OK to proceed or Cancel if you have changed your mind.
Additional Notes for Daily Interest Bearing Accounts
Interest on trust that has been deposited in a daily interest bearing account will need to be paid out at closing. If you have not received or reviewed an updated bank statement at the time of closing and unsure of the interest earned on the deposit, Back Office can accommodate this situation by using the partial payment transaction. Any transactions that have interest bearing status (as opposed to a Term Deposit/GIC) can be entered as a Partial Payment transaction. Because the deposit (and any interest) is attached to the Main transaction, this transaction can be processed separately from the secondary transaction. The secondary transaction (all commission related items) can be disbursed in entirety at closing. The Main transaction can be closed once the bank information is received, and interest checks and/or interest process fees can be disbursed at that time.