This is step 3 of the create wizard. These four period fields plus the rate are required. Officers inherit them when they open a savings account, and can still change the rate on that account’s Optional tab.

Nominal annual interest rate

The advertised yearly rate on this product, as a percent. Zero is allowed — use that for a pass-through or compulsory account that should not earn interest.

This is a nominal rate: it is the face rate before compounding. How often interest is added to the balance (compounding) and how often that interest is actually credited to the account (posting) are separate fields below.

On overdraft, a different rate can be set on settings. That rate is what you charge the client for using overdraft; this field is what you pay the client on a positive balance.

Compounding period

How often earned interest is added into the balance that later interest is calculated on. More frequent compounding slightly increases the effective return for the same nominal rate.

Choice	Meaning
Daily	Interest compounds every day. Usual for true savings.
Monthly	Once a month.
Quarterly	Once a quarter.
Bi-annual	Twice a year.
Annual	Once a year.

Compounding without posting only affects the running calculation. The client does not see a credit until interest is posted.

Posting period

How often calculated interest is credited (or, with accrual accounting, moved from interest payable onto the account). Posting creates a visible interest transaction on the savings workspace.

Choice	Meaning
Daily	Credit interest every day.
Monthly	Credit on the calendar month: January through 31 January, then the next period. Activation day does not change later posting dates after the first stub.
Quarterly	Each calendar quarter.
Bi-annual	Twice a year, on calendar halves.
Annual	Once a year, on the calendar year.
Anniversary monthly	Credit every month on the same day of month the account opened (or the last day of shorter months). An account opened on the 15th posts around the 15th, not month-end.
Anniversary quarterly	Same idea every three months from the opening day.
Anniversary bi-annual	Every six months from the opening day.
Anniversary annual	Once a year on the opening anniversary.

Daily compounding with monthly posting is still a common pair: interest builds every day, then a monthly job credits it. Daily posting is available when you want a credit every day. Anniversary choices follow the account’s opening day instead of the calendar period.

Officers can calculate interest (update the running figure without a credit) or post interest from the savings header. Posting as of a date is a separate action. See Savings.

Interest calculation

The balance the rate is applied to each day.

Daily balance — each day’s closing balance earns that day’s slice of the annual rate. A large deposit yesterday earns tomorrow; a withdrawal today stops earning on the amount withdrawn.
Average daily balance — the average of daily balances over the calculation period earns interest. Short spikes have less effect than on daily balance.

Days in year

Used when converting the annual rate into a daily rate.

365 — divide the annual rate by 365.
360 — divide by 360 (a banking-year convention). The daily rate is slightly higher than 365 for the same nominal rate.

Savings products do not offer “actual” days in year (loan products do).

How the pieces work together

Each day (or period), the system takes the chosen balance (daily or average).
It applies the nominal annual rate using days in year to get a daily (or period) amount.
Compounding decides when that amount is folded into the balance used for the next calculation.
Posting decides when the client’s account is actually credited.

Minimum balance for interest can skip calculation while the balance is below a floor. Withhold tax, if enabled on settings, is taken from posted interest — not from this rate field.

Savings product terms