Transferring a Deposit from one client to another

Transferring a Deposit from one client to another

Purpose

This happens when the Finance Company gets a Registered Transfer of Deposit Form, and needs to mature the investment as at the date of transfer, and set up a new account for the remainder of the term.  The interest up to the date of transfer will go to the original client.  The balance of the interest will go to the new client.

Process

There are two methods of undertaking a transfer.

Option 1 should be used if the Deposit Movement Analysis Report is used by your business.

Option 2 may be used if the Deposit Movement Analysis report is not used.

Note:  A Call Account may also be setup instead of a new deposit. In this case the Call Savings Account should be created, the Early Maturity process used to mature the deposit, and a Cashbook Journal completed to transfer the funds to the new call account.

Option 1 - Transfer Non Cash Method

It is important that a separate transaction type is used for this transfer and that this transaction type is not selected when defining the  and  dialog setups when running the Deposit Movement Analysis Report

Create the new account

You must  a new account that is exactly the same as the original account except for the following fields:

Field
Explanation
Client
[F2] to  or  the client

Make sure the IRD, Withholding Tax and Bank Account details are set up correctly for the new client
Term
Set the term to the number of days left until maturity of the original account

You can calculate this using the date builder
Frequency
Set the maturity frequency to days
Open Date
This must be the date of the transfer

It will be the same as the close date of the original account

Check the maturity date is the same as the original maturity date of the previous account

Check the override rate is the same as the original account

Check the setup of the  and  buttons

Maturing the original account

Edit the original account and update the following fields

FieldExplanation
Maturity Date
This must be the date of the transfer

It will be the same as the open date of the new account
Maturity Actions
This must be cheque


Run Post Maturity Instructions, this will leave a balance on the original account

Transfer the Balance

It is important that a separate Transaction Type is used for this transfer and that this transaction type is NOT selected when defining the  and  dialog setups when running the Deposit Movement Analysis Report

Transaction Type Setup

Field
Explanation
Code
DPXFER
Description
Deposit Transfer
System
Deposit
Ledger
Current
Control
Manual Input
GL Code
[F2] and  your contra account (usually 998.00)
Tax Code
None
Show Client
Check on

Load the transfer transactions

  1. Deposit | Access Deposit Accounts
Enter the Originating account code and , , , 

Field
Explanation
Originating Account Transaction Type
[F2] to  the Deposit transfer Transaction Type
Originating Transaction Reference and Description
Populates automatically, these may be changed
Value Date
Enter the date the deposit is to be transferred
Amount
Enter the balance to be transferred

This will be a debit / positive amount
Target Account
[F2] to  the new deposit account 
Target Account Transaction Type
[F2] to  the Deposit transfer Transaction Type
Target Transaction Reference and Description
Populates automatically, these may be changed


A confirmation screen will appear. Check this carefully, particularly that the amount shows as a positive/debit figure on the ‘from’ account, and a negative/credit figure on the ‘to’ account.

 to post the transfer

Option 2 - Reinvestment Method

This is a simple process, but as it uses the Account Maturity Transaction Type should only be used if your business does not use the Deposit Movement Analysis Report

Update Old Account

Alter the maturing deposit account to reflect the new maturity details.

Determine the number of days left until maturity of the account.  This will be the term of the new account.

If the transfer date is to be today [F2] on the maturity date field. You can use the date builder to calculate the number of days, from today, until the original maturity date.

 

 to load values from the existing account

Field
Explanation
Term
Set the term to the number of days left until original maturity of the account as calculated above
Frequency
Set the Maturity Frequency to Days
Interest Profile
Leave as it is
Next Broker Commission Matrix
Delete the Commission Matrix
Next Account Source
This may be completed if Sources are used - may be set to, say Transfer of Deposit
Next Interest Rate
This will default to the Override Rate currently being used by this account

It can be changed to the correct rate


Check the Interest Action. It is most probable that this will be paid out, but if it is also to be transferred, change it to Reinvest

Original Account

 the original account to check it

If the interest action on the original account had been set to:

Field
Explanation
Direct Credit
Until the cashbook post to other system process is run the current balance will be the net interest to be paid out

When the cashbook post to other system has been run the account balance will be xero
Cheque
The current balance will be the interest

This will not be set to zero until the cheque is written, processed through the cashbook and post to other system has been run
Reinvest
The interest will be included with the principal reinvested

The current balance will be zero

New Account

 the new account

This account will still be attached to the same client as the original account

The following steps now need to be undertaken:

Delete the client [F6] and [F2] to  or  the client

Make sure the IRD, Withholding Tax and Bank Account details are set up correctly for the new client

Check the maturity date is the same as the original maturity date of the previous account

Check the override rate is the same as the original account

Check the setup of the  and  buttons



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