Changing DOD/DOW Dividend Rates

The Share Rate Change - Date of Deposit to Date of Withdrawal window lets you change rates on accounts using the DOD/DOW method of dividend calculation. Portico performs one of the following rate change options:

Calculate and post dividends at the current rate(s) in the back-office cycle for the specified effective date. If an effective date of today or an effective date in the past is entered, processing will occur in the next back-office cycle. Enter new rate(s) and balance(s) for future calculation purposes.
Calculate dividends at the current rate(s) in that night's back-office cycle. Store dividends and then post dividends on the date in the Next Post field on the Share Profiles - Dividends tab. Enter new rate(s) and balance(s) for future calculation purposes.

The Share Rate Change - Date of Deposit to Date of Withdrawal window is only valid for share types with the date-of-deposit to date-of-withdrawal dividend calculation method. The Method field must be C - Date-of-Deposit/Date-of-Withdrawal (DOD/DOW) on the Share Profiles - Dividends tab.

To access the Share Rate Change - Date of Deposit to Date of Withdrawal window, under Administration on the Portico Explorer Bar, click Tools. On the Tools top menu bar, click Rate Changes, then click Shares. Click the Select Share Type down arrow to select the share type and click the green arrow.

How do I?

To calculate the annual percentage yield (APY) for a share type , complete the following steps:

Click the Select a Share Type down arrow to select the share type. The description of the share type appears in the APY Calculator group box.
In the Basic Calculation group box, enter the amount to base the calculation on in the Amount field. Length: 9 numeric.
Click the Begin Date down arrow to select the beginning date from the pop-up calendar or enter the date in MM/DD/YYYY format. System default is the teller effective date.The beginning date cannot be prior to the last dividend paid date as specified on the Share Profiles - Dividends tab.
Click the End Date down arrow to select the ending date from the pop-up calendar or enter the date in MM/DD/YYYY format. The ending date cannot be greater than one year in the future.System default is the next dividend paid date as specified on the Share Profiles - Dividends tab.The Number of Days field will display the number of days from the beginning date to the ending date that will be used in the calculation.
Click the Dividend Frequency down arrow to select how often Portico will pay dividends on the account. The valid options are: Monthly (only rate options 0, 5, or 6 are allowed), Quarterly (system default), Semi-annually, Annually and Term. The dividend dates should correspond with the dividend frequency.
Click the Compounding Code down arrow to select when Portico will compound dividends on the account. The valid options are: Daily (only used with dividend method C), Monthly, Quarterly, Semi-annually, Annually and Term. The compounding code will default to the dividend frequency from the share or certificate type profile. With the exception of Daily, the compounding code must equal the dividend payment frequency.
Select the Compound Dividends check box to compound dividends on the account.
Click the Dividend Method down arrow to select the method used to calculate dividends. The valid options are: Average Daily Balance (ADB) or Date-of-Deposit/Date-of-Withdrawal (DOD/DOW).
Click the Rate Option down arrow to select the method of determining the rate and balance for calculating dividends. The valid options are: 0 - Single/flat rate. This option must be selected if C (DOD/DOW) appears in the Dividend Method field. Plateau rates and balances are allowed with dividend calculation method C. System default. 5 - Split rates - Based on each eligible share balance in the dividend period. The appropriate plateau rate is multiplied by the portion of the balance within that plateau range. The Rate 1 field cannot specify 0.00. Also, rate option 5 is only valid if A (ADB) appears in the Dividend Method field. 6 - Single rate - Based on each eligible share balance during the dividend period.
In the Min Balance for Dividend field, enter the minimum share balance required to receive dividends. The minimum share balance from the Share Profiles - Dividends tab will appear in this field. Length: 8 numeric including decimal. The minimum share balance is not used in the calculation. If there is a value in this field, the Dividend Frequency field must specify M, and the Dividend Method field must specify A. If the member's average daily balance is less than the value in this field, the member will not receive a dividend for that period. To indicate the minimum daily balance to receive dividends on DOD/DOW share types, the Rate Option field must specify zero (0), the Rate 1 field must specify 0.000, and the Balance 1 field must be greater than zero (0). If the member's balance on a given day is not equal to or greater than the amount specified in the Balance 1 field, the member will not receive dividends for that day. All zeroes indicate no minimum balance is required. When calculating dividends, the system considers a negative balance the same as a zero balance. The valid value must be zero or greater.
In the Min W\D Balance field, enter the minimum required share balance. Length: 8 numeric including decimal. The minimum required share balance from the Share Profiles - Account Information tab will appear in this field. The minimum required share balance is not used in the calculation. The back-office cycle will not draw the share balance below this amount. Online withdrawals causing a share balance below this minimum amount will require an override teller. The valid value must be zero or greater.
For tiered dividend rates, in the Rate field, enter the dividend rate applied through the amount specified in the corresponding Balance field. Valid rates are 0 through 20.000 percent. Then, in the Balance field, enter the maximum balance amount to which the dividend rate applies. Balance amounts are whole dollars. On plateau dividends, the balances must be in ascending order. If this balance is zero, then the following rates and balances must also be zero. The Rate 1 field indicates a flat dividend rate, when the Balance 1 field is zero. If 5 appears in the Rate Option field, the Rate 1 field cannot specify 0.00.
Click Calculate. The Calculation Results group box will display the annual percentage yield (APY) and the total dividend/interest amount calculated based on the parameters specified. The APY is the projected annual earnings based on the deposit amount, the number of days in the dividend period or in the date range specified, and the dividend amount. TISA regulation allows a variance of .05 in the APY calculation. For example, assume you calculated an APY of 2.75 using Portico. If you used a business calculator and arrived at 2.71 or 2.79, the calculation results on both Portico and the business calculator would be considered accurate since they are within the .05 tolerance specified by TISA.The APY Range columns indicate the low end annual percentage yield (APY) and high end annual percentage yield (APY) calculated by the system for the rate and balance specified. The annual percentage yield will only display on shares with a Dividend Method of A or 5.

Click the printer icon to print the APY calculation. Click Apply to make the rate change, then click Save. Click Reset to clear the fields and re-calculate the share APY.

Back dated and future dated effective dates may be used. Enter the last day of the previous dividend period when changing the rate effective the first day of the current period. For example, if you want to make a rate change effective 01/01/16, then you must enter an effective date of 12/31/15 in the Effective Date field.

To change the plateau dividend rates on DOD/DOW accounts, complete the fields in the Plateau grid. You can change the rates or balances any time during the dividend period including the last day of the current dividend period. In the New Rate 1 - Rate 10 fields, enter the dividend rate applied through the amount in the corresponding balance field. Valid rates are 0 through 20.000 percent. This field indicates a flat dividend rate, when the Balance 1 field is zero. In the New Balance 1 - Balance 9 fields, enter the maximum balance amount to which the dividend rate applies. On plateau dividends, the balances must be ascending. If a balance field is zero, then the following rates and balances must also be zero. Balance amounts are in whole dollars. For example, if the Balance 1 field is $20,000, then any balance up to $20,000.99 uses the dividend rate in the Rate 1 field.

You can apply the same rate changes to multiple share types using the Multiple Share Type Rate Maintenance group box. Once you select a share type in the Select Share Type field, the Copy rate changes to share type drop-down list is populated with only the share types that have a matching dividend method. To add a share type on the Share Rate Change window, click the Copy rate changes to share type down arrow to select a share type and click Add. Repeat this process to add additional share types. Then, click Save. The share types specified will receive the same rate change on the designated effective date.

If you are applying the same rate changes to multiple share types and the share types have tiered rates and balances, you must enter a rate and balance in the New field for each of the rate and balance fields in use. In addition, we recommend that the share types in the Selected shares for rate change grid do not have more tiered rates and balances than the share type in the Select Share Type field. For example, if the share type in the Select Share Type field uses three rates and balances, then the share types in the Selected shares for rate change grid should also use three rates and balances.

You can specify a minimum balance for dividends on share types with DOD/DOW by specifying zero (00.000) in the New Rate 1 field and the minimum balance in the New Balance 1 field. The Minimum Balance to Earn Dividends field on the Share Profiles - Dividends tab must specify 00.00 (zeros).

To post dividends in the next back-office cycle or on the date specified in the Dividend Post Date field, select the Post in Next Back Office Cycle check box. If left blank, dividends will post on the date specified in the Next Post field on the Share Profiles - Dividends tab.

Select the Reverse this Rate Change Request check box to reverse a rate change completed on the same day.

If the new dividend rates and corresponding balances are correct, click Save. Portico updates the Share Profiles - Dividends tab with the new rates and balances.

The message EFFECTIVE DATE IS THE LAST DAY AT THE OLD DIVIDEND RATE appears on the Share Rate Change - Date of Deposit to Date of Withdrawal window as a reminder of the importance of the effective date when performing the rate change.

The effective date entered on the Share Rate Change - Date of Deposit to Date of Withdrawal window indicates the last date dividends will be calculated at the current rate(s). Dividends will be calculated at the new rate(s) on the first day after the effective date. You can specify an effective date in up to 5 days in the future or any date in the past from the current date to the last dividend date on the Share Profiles - Dividends tab. If you complete the Share Rate Change - Date of Deposit to Date of Withdrawal window with an effective date in the past, the system recalculates the dividends from the beginning of the current dividend period through the current processing date.

If the effective date is the current date or a date in the past, the new rates and balances will also appear in the Pending Dividend Rate Changes group box until after the next back-office cycle.

If a future effective date is used, the new information will appear in the Pending Dividend Rate Changes group box until after the effective date's back-office cycle. At that point, Portico will automatically calculate the dividends and set the Last Posted Date field on the Shares - General tab. The system will always calculate the dividends through the process-through date and set the Last Posted Date field to the process-through date plus one. After processing the rate changes, the system resets the Pending Dividend Rate Changes group box.

If dividends are posted using the Post in Next Back Office Cycle check box, the member's statement will reflect the dates through which the dividend was calculated, the dividend amount, and the annual percentage yield earned (APYE).

You must wait one back-office cycle after a rate change to run the Dividend Paid Report 220 to see the effects of the rate change on the Accrued Dividends Payable by Share Type Report 215. If you complete a rate change at monthend and you are not paying dividends monthly, you must wait one back-office cycle before running the 220 Report.

If you perform the Share Rate Change - Date of Deposit to Date of Withdrawal window on Friday, the system begins the calculation of dividends using the new rate on Saturday.

When the Effective Date field is backdated for a rate change and the Post in Next Back Office Cycle check box is selected, the effective date of the rate change equals the date in the Effective Date field. However, dividends are posted the evening of the current day, and the effective date of the dividend posting is the current date.

You can only perform the Share Rate Change - Date of Deposit to Date of Withdrawal window in branch 000. You may perform the Share Rate Change - Date of Deposit to Date of Withdrawal window a maximum of 99 times per day.

When the system posts dividends with a single dividend rate, disclosure information (the number of days and rate used to calculate dividends) appears on the member's statement.

The message DIVIDEND appears on the member's statement when the system uses the plateau dividend rate option, regardless of when dividends are paid. This message also appears when dividend rates are changed more often than the dividends are posted.

The balances must be the same or incremental.

General Ledger Effects: none

Related Reports:

Dividend Paid Report 220 - The system produces the Dividend Paid Report 220 if the Share Rate Change - Date of Deposit to Date of Withdrawal window posts dividends. The 220 Report contains a copy of the share and certificate processing rules in the Updated Rules section.
Dividend Calculated Report 221 - The system produces the Dividend Calculated Report 221 if the Share Rate Change - Date of Deposit to Date of Withdrawal window calculates and stores the dividends.

Correction Procedures: The system allows you to remove a pending rate change on the Share Profiles - Dividends tab. Select the Reverse this Rate Change Request check box on the Share Rate Change - Date of Deposit to Date of Withdrawal window and click Save. You can perform the reversal on or before the date in the Effective Date field is reached. View the information immediately on a pending Share Rate Change - Date of Deposit to Date of Withdrawal window by accessing the Share Profiles - Dividends tab.

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