Fixed Deposit Interest Calculation Issue

[Former Member]

Hi Experts,

We have implemented FD Financial instrument using Standard Product type available in SAP for one of our client.

We are facing issues in Interest Calculation users are validating Interest calculated by SAP using standard Interest Calculation method and Method used by the Bank. I have tried every possible Scenario to match interest with the bank interest using Standard interest method available in SAP but not get any success in it.

Bank Interest Calculation formula

Lets suppose if the Transaction is of 192 days. Bank do Quarterly settlement of interest.

Then 192 days there are 2 Quarters Bank will use Formula

Interest = Amount*Interest Rate/12*No of quarters

For Reaming 12 days bank will use Formula :-

Interest = Amount*Interest Rate/12*No of days/no of days ( Month in which interest is due)

Please Suggest any formula we can use to get the interest match with the Bank interest or any work around is possible. PFA the excel sheet with details explanation of BANK calculation and SAP calculation.

Regards,

Rohit

[rohankamat1985]

Hi Rohit,

I am facing similar issue with FD product in my implementation. The issue is that in SAP, we calculate interest on daily basis. While it seems, bank calculate it on monthly/Quarterly basis as a whole divided by 12. Due to this , there will be the mismatch of the interest in every quarter and also on maturity.

Ideally, banks should calculate interest as 90/365 , 91/365, etc depending on number of days in the quarters.

One work around that we can do is manually editing the cash flows and put whatever cash flow the bank if giving.

Also, In your above post, the attachment is missing.

Regards,

Rohan

[Former Member]

Hi Rohan,

I have suggested the cash flow edit solution to the client, but they are not happy with the solution as they have to manually edit the flows for 2K+ FDs. I have also raised the issue with SAP. PFA reply from SAP it may help you to solve the issue you are facing.

Regards,

Rohit

[rohankamat1985]

Hi Rohit,

It seems that the reply given by SAP is a bit contradictory. It is clearly mentioned in Note 2226447 that the BADI_TB_FIMA_CF_MANUPULATE is available only for Variable Interest product and not for Fixed Interest products.

So we cannot use this BADI for Fixed Deposits.

Don't know why they have replied to you that this note has to be implemented for Fixed Term Deposits.

Regards,

Rohan

[grigoriy_babitskiy]

I have just checked BADI with tr. TM01 and product category 510, product type 51A.

I created simple code - change Interest calculation method to 7 "360/360" if initial was 6 "Act/ActY"

TM01 -> 51A - 100

Badi has changed Interest calculation method.

everything was working good.