An interest plan is a configuration that defines how interest is calculated and applied to a specific product or account. This can include the interest rate, the compounding period (for example, daily, monthly, or quarterly), any associated fees or penalties, tax implications, and more. The plan can be tailored to the specific needs of a product or service, allowing for a wide range of interest-based financial solutions. For more information, see Interest-bearing accounts.

View interest plans

To view interest plans:

1. On the main menu, click Setup > Interest plans.

2. On the Interest plan information screen, click an interest plan to view its details.

Add a fixed interest rate plan

A fixed interest rate is an interest rate on a loan or investment that remains the same for the entire term or a specified part of the term.

To add a fixed rate interest plan:

1. On the main menu, click Setup > Interest plans.
2. On the Interest Plans screen, click Create.

3. On the Select an interest plan type screen, click Fixed rate.

4. Click Next.
5. On the Fixed rate plan details screen, enter a descriptive name for the plain in the Name field.

6. Click the Currency code menu and then choose the currency to be used.
7. Click one of the following buttons to select the accrual basis (method used to calculate the interest accrual):
   1. Actual/360 (or Act/360): Interest rate is divided by 360 and then multiplied by the actual number of days that the capital is borrowed.
   2. Actual/365 (or Act/365): Interest rate is divided by 365 and then multiplying it by the actual number of days that the capital is borrowed.
   3. Actual/Actual: This method is somewhat more complex as it involves taking into account the actual number of days in the relevant year. If the time period spans two different years, the interest is calculated separately for each year.
   4. BD/252: This option is often used in the Brazilian market. It takes into account only the number of business days in a year, which is typically 252. The interest rate is divided by 252 and then multiplied by the actual number of business days that the capital is borrowed.
8. Click one of the following buttons to select the interest type:
   1. Simple
   2. Compound
9. Click one of the following buttons to select the capitalization frequency:
   1. Daily
   2. Monthly
   3. Quarterly
   4. Half yearly
   5. Yearly
10. Click one of the following buttons to select the accrual frequency:
    1. Daily
    2. Monthly
    3. Quarterly
    4. Half yearly
    5. Yearly
11. In the Fixed interest rate field, enter the interest rate.
12. Click Next.
13. On the Associate processing code screen, click one of the following buttons:
    1. Do not associate: Do not associate this interest plan with a processing code.
    2. Associate: Associate this interest plan with a processing code
       You can associate this interest plan with a processing code to create your financial setup. This association is optional, define what makes sense for your business plan.
14. Click Next.
15. On the Review screen, verify that the information you provided is correct.
16. Click Finish.

Add a floating interest rate plan

A floating interest rate, also known as a variable or adjustable rate, is an interest rate that can change over the term of a loan or investment. It typically is based on a benchmark interest rate or market index that changes periodically, such as the U.S. Prime Rate or the London Interbank Offered Rate (LIBOR).

In addition to the benchmark rate, the interest rate on a loan should also include a margin that is kept constant. For example, if the benchmark rate is 3 percent and the margin is 2 percent, the interest rate would be 5 percent. If the benchmark rate rises to 4 percent, the interest rate would adjust to 6 percent.

To add a floating rate interest plan:

1. On the main menu, click Setup > Interest plans.
2. On the Interest Plans screen, click Create.
3. On the Select an interest plan type screen, click Floating rate.

4. Click Next.
5. On the Floating rate plan details screen, enter a descriptive name for the plan in the Name field.

6. Click the Currency code menu and then choose the currency to be used.
7. Click one of the following buttons to select the accrual basis (method used to calculate the interest accrual):
   1. Actual/360 (or Act/360): Interest rate is divided by 360 and then multiplied by the actual number of days that the capital is borrowed.
   2. Actual/365 (or Act/365): Interest rate is divided by 365 and then multiplied by the actual number of days that the capital is borrowed.
   3. Actual/Actual: This complex method takes into account the actual number of days in the relevant year. If the time period spans two different years, the interest is calculated separately for each year.
   4. BD/252: This option is often used in the Brazilian market. It takes into account only the number of business days in a year, which is typically 252. The interest rate is divided by 252 and then multiplied by the actual number of business days that the capital is borrowed.
8. Click one of the following buttons to select the interest type:
   1. Simple
   2. Compound
9. Click one of the following buttons to select the capitalization frequency:
   1. Daily
   2. Monthly
   3. Quarterly
   4. Half yearly
   5. Yearly
10. Click one of the following buttons to select the accrual frequency:
    1. Daily
    2. Monthly
    3. Quarterly
    4. Half yearly
    5. Yearly
11. Click one of the following buttons to select the benchmark index used to measure the interest a value has over time.
    1. BOE: (Bank of England, UK)
    2. DI: (Interbank Deposit Contract, Brazil)
    3. FED: (Federal Reserve System, USA)
    4. RBA: (Reserve Bank of Australia)
    5. RBI: (Reserve Bank of India)
12. (Optional) In the Margin rate field, enter the additional interest rate added to the benchmark rate to determine the total interest rate (for example, 103 percent of the FED rate).
13. (Optional) In the Margin field, enter the difference between the interest rate charged on loans and the interest rate paid on deposits.
14. Click Next.
15. On the Attach processing code screen, click one of the following buttons:
    1. Do not attach: Do not attach this interest plan to a processing code.
    2. Attach: Attach this interest plan to one or more processing codes.
    3. If you are attaching one or more processing codes, click the Select button for each one.

16. Click Next.
17. On the Review screen, verify that the information you provided is correct.
18. Click Finish.