Processing Interest Capitalization and Payment
Core Banking calculates the accrued interest for each deposit while running its Start of Day scheduled job. The interest calculation depends on the contract and banking product configuration, as follows:
For If the DepositAggregateItemValues Core Banking system parameter's value is set to False, Core Banking recovers the entire interest paid until that moment and after that the sight interest from the beginning until the transaction date is paid (if a sight interest is configured on the banking product). If the DepositAggregateItemValuesCore Banking system parameter's value is set to True, the system recovers the difference between the paid interest and the sight interest that should be paid (if there is a sight interest configured on the banking product).
The interest to recover value affects the deposit amount or the interest amount, depending on the deposit banking product configuration: with interest capitalization or not, with interest payment on the maturity date or on a specific interval.
If the deposit is without capitalization, which means the interest is paid in the current account, in case a withdrawal transaction occurs, the interest already paid is recovered from the deposit amount.
For example, if a deposit is open for a period of 3 months with a monthly interest payment and the customer orders a withdrawal after the first month, the interest already paid in the current account is recovered from the deposit amount.
If the deposit is with capitalization, the interest is paid in the deposit account, so in case a withdrawal occurs, the interest is recovered from the deposit amount containing the initial value + the interest already paid, which means the initial amount is not affected.
The Generate Deposit Payments scheduled job performs the payments for the calculated interests on the deposit's maturity date. You can view the paid interest for a deposit in the Payments section:
Open the payment record to view more relevant details:
The interest is paid into the current account specified during deposit creation:
