Share Rate Maintenance

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URATE2-01

Share Account Dividend Rate

2689

PDVRTU


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This screen will appear when you click the Share Rate Update button on the first rate maintenance screen. (Corp ID 01 is selected by default.)

SEE ALSO: Manager's Notes - Pricing Strategies and CU*BASE Tools

SEE ALSO: Tips on Setting Up Online Banking Products

Helpful Resources

Visit Show Me the Steps for easy instructions on how to use CU*BASE to change share rates.

Screen Overview

This screen is used to update dividend rates for share-type accounts, including shares, checking, IRAs, club accounts, etc. It is also used to identify which share accounts your credit union allows members to view and/or open via It’s Me 247 online banking, if any.

Choosing the Right Effective Date

There are several factors to consider when determining an effective date for your rate changes:

Dividend Calculation Type

This refers to how dividends are calculated on the product:

  • Simple Daily or Compound Simply Daily - For both of these methods, dividends are accrued daily on the share account. When a rate change is put into place during daily dividend monitoring, the new rate is used from that point on when accruing daily dividends. (See below for more information.)

  • Average Daily Balance - For this method, dividends do not accrue daily but are calculated on the average daily balance as of the end of the dividend period. Rate changes with an effective date that is within the dividend period will be used when dividends are calculated and posted for that period. (See below for more information.)

Timing of Dividend Monitoring

This refers to when dividends are accrued (for the accrual calc. types), or when average daily balance is updated (for the average daily calc. type). Because of TIS guidelines, this is generally done during end-of-day (EOD) processing.

Scheduled rate changes are also put into effect during the dividend monitoring routine.

Timing of Dividend Posting

This refers to when dividends are actually paid to members. This can be done during beginning-of-day (BOD) processing or end-of-day (EOD) processing.\

  • IMPORTANT: If you monitor at EOD but post at BOD, take special care when scheduling your rate changes. Rate changes take effect during the dividend monitoring routine, not as part of dividend posting. See below for more tips on timing your rate changes.

Dividend Period

The starting and ending dates of the period for which dividends are paid. For example, if dividends pay monthly, the dividend period might be March 1 through March 31.

 

The factors involved in the timing for rate changes can be complex. If you are not completely sure how your products are set up, be sure to consult with a client service representative first for advice on the timing! (CU*TIP: Use the Print Share Div Config Report feature to review how your products are currently set up.)

Timing Your Rate Changes: Simple Daily/Compound Dividend Calc Type

For products that accrue dividends on a daily basis, changes made to the base rate here will affect the rate used by the system to calculate the daily dividend accrual as of the effective date. Changes are made during dividend monitoring on the effective date.

If a new rate is entered with today’s date, the change will take effect on the product immediately. Remember that for most credit unions, dividends are accrued during end-of-day processing, which means that that night’s dividend accrual will be at the new rate.

Keep in mind that for products with a daily accrual, a change that takes place in the middle of a dividend period will affect all dividends calculated from that point on. If a rate changes in the middle of a dividend period, it could be very difficult to explain rate calculations to members. Therefore, it is critical to plan ahead when rate changes are to be made, so that they take effect on the appropriate day. (Be sure to plan ahead for holidays and weekends where daily processing is not performed.)

Forget to Schedule a Rate Change?

For products with a daily accrual, rate changes that need to take effect on a date already past require special handling by a CU*BASE representative (referred to as dividend regeneration). If you forget to set a rate change and want it to affect past accruals, also remember that a regeneration can be done, but the recalculations must start at the beginning of a dividend calculation period (i.e., quarter, month, etc., depending on the product configuration). For example, a change made on September 15 to a product where dividends are calculated quarterly could be made effective July 1 (the beginning of the quarter), but not September 1.

For accounts such as money markets where the rate changes weekly, if you forget to schedule a rate change for a particular week, it is not possible to regenerate dividends for just a portion of the dividend period.

Contact a Client Service Representative for more information about dividend regeneration.

Timing Your Rate Changes: Average Daily Balance Dividend Calc Type

For products that pay dividends based on average daily balance, CU*BASE does not accrue dividends every day. Instead, the system monitors the account balance very day, adding each day’s balance to a cumulative field. When dividends are paid, this cumulative total is divided by the number of days in the period to determine the average daily balance on which dividends will be paid.

When dividends are posted, the system looks at the rate on the product at that point in time and uses that rate to calculate the dividend amount. Remember that rate changes occur as part of the daily dividend monitoring routine, not dividend posting. This is particularly important if your credit union monitors during EOD but posts during BOD. Rate changes must be scheduled on the day before the dividends are to post in order for the rate to be used when calculating dividends for that period.

As a rule, for average daily balance products, a rate change can be made at any time during the dividend period, but the effective date must be within the dividend period. For example, say your current dividend period is January 1 through March 31, and you monitor dividends during EOD. A rate change can be entered any time between January 1 and March 31, with an effective date of no later than March 31, and that rate will be used when calculating and posting dividends for that dividend period.

Updating Base Rates

To update the base rates for each product, simply enter the desired rate (use two places past the decimal point) into the New Rate column, and the date on which the rate should take effect (again, keeping in mind the product configuration and calculation parameters) into the New Rate Effective Date column for each item.

When done, use Save/Update (F20) to record the changes. A confirmation window will appear:

Verify each change made by using Enter. If a change is incorrect, use Skip (F8) on the maintenance screen and make the appropriate changes. Use Save/Update (F20) again to save and reconfirm.

A report will be generated automatically whenever Save/Done (F20) is used in the share rate maintenance screen. It will also be generated every day during daily processing. (See below for a sample of the report.) If a rate change was actually put into effect, it will be shown on the report; otherwise, it will be blank to indicate that rates were monitored but no changes were scheduled.

Updating Split Rates

If a product has a split rate configuration, select the flag in the Split Rate column to display the split rate detail screen. This can also be used to set up split rate balances for a new split rate product.

IMPORTANT: If you want to change the balance ranges themselves, remember that those changes cannot be scheduled ahead of time - they take effect immediately when they are entered, and should therefore generally be performed only on the first day of the dividend period. Changes made in the middle of a dividend period could make it very difficult to explain dividend calculations to members. Contact a client service representative for assistance making the changes to coincide with the beginning of a new dividend period, especially if the start of the period falls on a weekend or holiday.

Calculating APY

To help determine which rate should be used to achieve a specific desired APY (Annual Percentage Yield) for any product, use the spyglass next to any APY to access the APY Rate Calculator.

Field Descriptions

Field Name

Description

DV AP

The Dividend Application code indicates the type of account.

Description

A description of the account type.

Next Pay Date

The date the next dividend will be posted to member accounts.

Rate History, Procedures, and Marketing Tips

Use the icon to see a history of previous rate changes for a share product.

Use the icon to record specific credit union procedures that should be followed by member service or other personnel for the selected product.

Use the icon to record tips and comments that will aid member service and loan personnel in selling the selected share product.

OLB

This column is used to make this product available to members via online banking. Enter a sequential number to indicate the order in which the product will be display on the online banking rate board, then use the to access the Online Banking screen to set up the defaults.

  • NOTE:  A sub account cannot be offered online for purchase if certain membership designation types are restricted from opening it.  Learn more here.

Current Base Rate

This column shows the current base rate in place for each product.

Split Rate

A icon in this column indicates that the product has a Split Rate. To create a split rate product and edit the balance ranges, select the orange dot to access the split rate detail screen.

APY

The Annual Percentage Yield, provided in compliance with the Truth in Savings regulations. This is calculated taking into account compounding and other variables.

 

Select the spyglass next to any rate in this field to use the APY Calculator to help determine which rate should be used to achieve a specific desired APY (Annual Percentage Yield).

Current Rate Effective Date

This column shows the date on which the Curr Base Rate was put into effect. (Remember that the rate is actually updated as part of the dividend monitoring routine, which usually occurs during EOD processing for that date.)

New Rate

Use this column to enter a new rate for any share product. Be sure to also enter a date into the Effective Date column and use Save/Done (F20) to record the change.

Effective Date [MMDDYYY]

If a rate was entered into the New Rate column, use this column to enter the date on which the new rate should take effect. (Remember that the date you choose will depend on the product configuration and dividend calculation parameters. Contact a client service representative for assistance if you are unsure of an appropriate date.)

Be sure to use Save/Done (F20) to record the change when done.

Report Sample

The following report is generated automatically whenever Save/Update (F20) is used in the share rate maintenance screen. It will also be generated every day during daily processing. If a rate change was actually put into effect, it will be shown on the report; otherwise, it will be blank to indicate that rates were monitored but no changes were scheduled.

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Link to ID: https://help.cubase.org/cubase/cubase.htm#URATE2-01.htm