Setting "Net Effective Rate" for Household Statistics

Screen ID:	n/a
Screen Title:	Net Effective Household Rate Calculation Parameters
Panel ID:	2161
Tool Number:	n/a
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This window appears when you use Rate Information" (F14) on the initial Household Maintenance screen.

SEE ALSO: Household & Member Statistics

This window is used to configure comparison rates that are used in running the Household Statistical "Net Effective Rate" Report.

The Net Effective Rate of any household is based on understanding the investment of household funds (net savers) or the income potential of household loans (net borrowers). In most cases, a household will have both savings and loan products, but not in the same proportion. Where the excesses occur (savings or loans), we must compare the excesses to either a cost of funds rate (for loans), or the investment opportunity rate (for savings).

Therefore, to use the Net Effective Rate analysis report, you must configure a Comparison Rate for Investing Excess Shares (the investment opportunity rate), and a Comparison Rate for Excess Loan Cost of Funds.

This feature does not try to match assets and liabilities like in an ALM Gap Analysis, but is based on a generic or average set of parameters.

CU*BASE will first compare the household savings to the household loans and calculate the spread on the household invested funds. Next, the excess funds (savings or loans) will be compared to the configured comparison rate. Based on the total funds, CU*BASE will then calculate a weighted rate for the entire household. Click here to read details on this calculation.