Oracle FLEXCUBE allows you to calculate the Annual Percentage Yield (APY) on customer accounts and display the APY on account statements, so as to enable your customer to compare interest rates offered by different banks.
In order to enable the system to compute APY on CASA accounts, you need to:
This chapter contains the following topics:
When you identify the APY formula, you must also specify the basis upon which the interest used for APY computation will be computed. You can choose either the average balance basis (i.e., the interest is computed based on average balance, and APY is computed up to the latest interest liquidation) or a daily balance basis (interest is computed based on daily balance, and APY calculation takes into account the interest accrued till the current statement date)
If the interest is computed on an average balance basis, specify ‘LIQD’ as the APY basis; or if the interest is computed on a daily balance basis, specify ‘ACCR’ as the APY basis.
For an IC deposit, you must specify the APY basis as ‘ACCR’.
The different scenarios that could arise upon choosing these options are shown below:
Basis |
Case |
APY Logic |
Average Balance |
Statement frequency is asynchronous with liquidation frequency, for instance, if interest is calculated on the average daily balance for the calendar month and account statement is provided from 16th of one month to the 15th of next month. |
Interest used for APY calculation will be the interest liquidated for the previous period, and you must maintain the APY basis as ‘LIQD’. |
Average Balance |
Statement frequency is lesser than liquidation frequency, for instance, if interest is paid on a quarterly basis for the quarter and account statements are provided monthly |
APY is printed only when the interest is liquidated, i.e., the account statement for first two months of the quarter does not print APY, and APY is printed in the account statement only for the third month. For such cases, you must maintain the APY basis as ‘LIQD’. |
Average Balance |
Statement frequency is more than liquidation frequency, for instance, if interest is paid on a monthly basis and account statements are provided annually |
APY calculation is based on the latest interest liquidation that occurred within the statement period. For such cases, you must maintain the APY basis as ‘LIQD’ |
Daily Balance |
Statement frequency is less than liquidation frequency, for instance, interest is calculated using the daily balance method, applied annually, and monthly statement is provided. |
APY calculation includes the interest accrued till the current statement date. For such cases, you must maintain the APY basis as ‘ACCR’ |
Daily Balance |
Statement frequency is more than liquidation frequency; as well and Statement frequency not in sync with liquidation frequency |
APY calculation includes the interest accrued till the current statement date. For such cases, you must maintain the APY basis as ‘ACCR’ |
Deposit Certificate Printing
You can have deposit certificates displaying the computed APY printed either as part of the EOD process or ad-hoc (printed from the menu).
For Example to compute APY, Your pays $30.37 in interest on a $1,000 six-month certificate of deposit (where the six-month period used by your bank contains 182 days), the annual percentage yield would be:
APY=100[(1+30.37/1,000) ^(365/182) -1] = 6.18%
To ensure the APY computation in the system, you must: