Interest on Bank Accounts - Set up Rules

Created by Erik Åkerlund, Modified on Mon, 17 Jun 2024 at 08:30 AM by Karin Östergren

Back Office > Cash Management > Bank Account Interest 

It is possible to set up and calculate interest on bank accounts, create accounting for the interest income/expense, initiate payment and see the information in reports. This is mainly used for in house banking accounts and Zero balancing cash pools. 

To create and/or change interest rules, you need to do the following steps:

1.  In Bank Account Interest Rules you set up the bank accounts and the rules that should apply for the interest calculation. It is possible to set up rules by currency, bank or cash pool. 

If its an internal bank accounts and you want to create a mirror deal to see the bank accounts interest from the subsidiaries point of view and do the accounting set the mirror account in Counterparty account. 

Note! There must also exist a Mirror rule for Bank account interest for the mirror transaction to be created.

If it is an external bank account interest that needs to be paid through treasury systems select the bank account in counterparty accounts to where the payment to go to.  

To add a rule, click on the plus sign: 

Then, to set up the terms go to your the details below:

 When you have set up all the rules, choose Run Rules in order to create the deals.

Note! If a rule is deactivated when the rules are run the link between the interest transaction (if there is one already) and the rule is removed. Meaning that the transaction will not be updated by the rule. And it is not possible to fixings on that transaction.

2. If you need to set up new interest rules that should be applied from another date (on the same currency, bank or cash pool), you add a new interest setup by clicking on the plus sign below:

Note that base interest rate, asset spread and liability spread is fixed per rule, if you change those, it will apply on all previous rules. Transactions that are locked (accounting and/or payment approved or exported) will however not be changed. Transactions not locked will be changed and new rules will apply on those transactions. Fixed transactions will change status to missing and needs to be fixed again.

Please note, Asset Spread will be shown in column Spread in Fixing View, while Liability Spread has it's own column.

To change interest and spreads without changing the earlier set up rules, this can be done in the fixing view when you do the fixing of the transactions.

After the new rule is set up, choose run rules again in order for the new rules to apply on existing interest transactions (deals).

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