Designing Your Deposit Classes

A deposit class contains the business rules that govern:

  • How and when deposit interest is calculated.
  • How the recommended deposit amount is calculated.
  • When a deposit will be automatically refunded to a customer.
  • When the system will recommend a new or additional deposit.

You will need multiple deposit classes if any of the above rules / conditions differ for different types of customers. For example, if residential customers use a different recommended deposit algorithm as compared to commercial customers, you'd need one deposit class for residential and another for commercial.

You will need additional deposit classes if your customers can have multiple deposits where each deposit is restricted to a specific type of debt. For example, if separate deposits are held for regulated and unregulated debt (and a customer could hold a combination of regulated and unregulated debt), you'd need one deposit class for regulated debt and another for unregulated debt.

We'll design deposit classes to satisfy the needs of a theoretical company to help you understand how to design your deposit classes. The following points describe the deposit requirements of our theoretical company:

  • The recommended deposit amount is 2 times the average bill (averaged over the last 12 months). This is true regardless of the type of customer or debt.
  • The system should automatically refund a deposit to a customer after:
    • The deposit has been held for at least 6 months; and
    • The account's credit rating is greater than the credit rating threshold defined on the installation record or the account’s CIS Division (i.e., the credit rating is no longer considered bad)
  • This is true regardless of the type of customer or debt.
  • Interest is calculated every 6 months. The interest rate is defined using a bill factor (refer to Setting Up Bill Factors for more information). This is true regardless of the type of customer or debt.
  • When it's time to refund a refund a deposit, all outstanding debt will be paid off first. If any moneys remain, a check should be sent to the customer for the remainder. This is true regardless of the type of customer or debt.
  • A customer could have both regulated and unregulated debt under a single account. When this happens, separate deposits will be held for each type of debt (where the regulated deposit can only be used to satisfy regulated debt and the unregulated deposit can only be used to satisfy unregulated debt).

You'd need the following deposit classes to satisfy the above requirement:

Deposit Class

Recommended Amount Rule

Auto Refund Condition

Interest Rules

Deposit Refund Method

Regulated

2 x Average Bill

Held for 6 months and credit rating is good

Simple interest every 6 months

Apply to outstanding debt first, refund remainder with a check

Unregulated

2 x Average Bill

Held for 6 months and credit rating is good

Simple interest every 6 months

Apply to outstanding debt first, refund remainder with a check

You may wonder why two deposit classes are needed when the rules are the same for both? Well, besides defining the applicable business rules for a deposit service agreement, a deposit class is defined on the SA types whose debt is covered by the deposit class' deposit. So, if you have two different types of debt where each type of debt can have its own deposit, you'd need at two deposit classes. Each deposit class would be associated with the service agreements that are being secured by the deposit.

Refer to Setting Up Deposit Classes for a description of the various algorithms defined in respect of a deposit class.