Investment Category Maintenance
Overview of IL260
Investment categories, also called term categories, are classifications distinguished by various details that apply to the investments they contain. Investments in a category have the same or similar term lengths and their interest rates fall within a defined range. They affect the same accounts in the general ledger and adhere to the same parameters for deposits, withdrawals, and balance amounts. Multiple investment types can be set up under a single investment category. To add a new investment category:
- From the DDI Connect main menu, double-click Financial Services
- Double-click Investments
- Double-click Setup
- Double-click Investment Category Maintenance. You will see a screen similar to this one:
To add a new investment category, click the Add button on the toolbar. You will see this screen:
There are two tabs to configure when adding a new investment category.
Settings Tab
The following fields are found on the Settings tab:
| Field | Description |
|---|---|
| Term Category | This is an alphanumeric field, establishing the code assigned to this investment (term) category. Your organization can determine its own coding rules. |
| Description | A brief description of the new category |
| High % | This is the maximum interest rate allowed for investment types in this category |
| Low % | This is the minimum interest rate allowed for investment types in this category. This field defaults to 0% |
| Current % | The current interest rate for investment types in this category |
| Extension type | Sets the default extension type for investments in this category. Type the code or click the list icon to select from a list of active investment types in the system |
| Demand note | If selected, investment types in this category are shown as demand notes |
| Allow additional deposits | Indicates whether additional deposits are allowed once investments within this category are purchased. Demand notes always allow additional deposits. This option provides users the ability to allow additional deposits to term notes if necessary |
| Restrict rate changes to end of term | If selected, interest rate changes are only allowed at the purchase date or maturity date |
| Form code | Default form code to use when printing investment notes of the current category. Type the form code or click the list icon to select from a list of active form codes in the system |
| Default term | The default number of months until maturity for investment types in this category |
| Min wdraw | Minimum withdrawal amount for investments in this category |
| Max wdraw % | The maximum percentage of investment balance that can be withdrawn for investments in this category |
| Min deposit | Minimum deposit amount for investments in this category |
| Min balance | Minimum overall balance for investments in this category |
| Penalty % | The percentage to be applied as a penalty when early withdrawals are made, if applicable |
| Penalty days | If the penalty is to be waived if within a certain number of days to maturity, enter that number of days here |
| Step-Up count | If this investment category allows investors to "step up" their interest rate based on deposits, you can enter the number of times the interest is allowed to "step up" here. Once the limit is reached, investment interest cannot be increased unless the current interest rate changes |
| Deposit cash account | If an account is set here, the field will override the default bank account specified in the Financial Services Setup - Financial System Settings for the "Investment AP account" |
| Tier basis | Establish whether tier basis is based on original principal balance or current principal balance |
Click the General Ledger tab.
General Ledger Tab
On this tab, you can establish the default general ledger accounts for certain transactions associated with this investment category. For each item, you can type in the appropriate GL number, or click the list icon to select from a list of active general ledger accounts in the system. Your options are:
| Field | Description |
|---|---|
| Cash Suspense | Account debited when penalty amounts are increased via financial adjustments. This account then needs to be cleared via a manual journal entry in order to correctly reflect the true reason for the shift in penalty |
| Daily Trans A/P | Account credited when investment withdrawals are requested. This is typically a liability account, which is then cleared when the payment (check, EFT) is made |
| EOM Int Payment | Account credited when investment interest needs to be paid. Similar to the daily accounts payable account |
| Interest Expense | Account debited when interest is calculated on an investment. This interest eventually needs to be paid to the investment owner. As a result the account is typically an expense account |
| Interest Reserve | Account credited when interest is calculated on an investment. This account is typically a liability account and is cleared when interest payments are made |
| Interest W/H Reserve | Account credited when interest is withheld from an interest check for various reasons (i.e., missing tax ID information, mandated withheld by the IRS). This account is typically a liability account, and the amounts that appear in it should be submitted to the IRS |
| Misc Adjust Expense | All-purpose account used in the financial adjustment process. Used as the offsetting account when changing principal balance, accrued interest, and interest withheld. A manual journal should be performed on a case-by-case basis in order to clear this miscellaneous adjustment activity |
| Penalty Income | Account debited when penalty amounts are withheld from an investment payment because of early redemption |
When you have finished entering all of the information, click Save to retain your changes.
