Governance and finance ยท Lesson 13 of 15

Savings interest

On Savings interest, a rate of 5% a year is set for compulsory savings with the board's approval reference, then September's accrual is previewed member by member (about 7,500 shillings in all), approved with the board minute, posted and shown as Reconciled.

About 15 minutes

Key ideas

1

Interest is not the surplus

Savings interest is what your SACCOS owes on members' savings, whatever the year's result. Dividends are different: they come later, from the surplus, under Surplus & Member Returns, which is the next lesson.

2

Set the rate

Under SACCOS, open Savings interest. On Products & rates, choose Set rate for compulsory savings; the by-laws minimum is shown on the form. In our example the rate is 5% a year, in force from the first of September, on the average monthly balance, paid yearly, with the board's approval reference. Choose Record rate to save it.

3

Every change is a new version

On Disclosures, each rate change is a new version from its date, rather than overwriting the old one. Members see the version in force.

4

Preview, approve, post

Upcoming runs lists what's due: in our example, September's accrual. Choose Open & preview to see, for each member, the average balance, the days and the interest; in our example about 7,500 shillings in all. Choose Approve and enter the minute where the board approved it. Then choose Post and confirm: the ledger entry is made, and the run shows Reconciled.

Practice

Try it in your training organization

  1. 1. Under SACCOS, open Savings interest and read the description: interest is owed whatever the year's result.
  2. 2. On Products & rates, choose Set rate for compulsory savings and find the by-laws minimum on the form.
  3. 3. Enter a training rate, for example 5% a year, in force from the first day of the month you will preview, on the average monthly balance, paid yearly, with a training board approval reference, then choose Record rate.
  4. 4. Open Disclosures and find the new version and the date it is in force from.
  5. 5. On Upcoming runs, choose Open & preview on the accrual that is due, and read each member's average balance, days and interest, and the total.
  6. 6. Choose Approve and enter a training board minute.
  7. 7. Choose Post, confirm, and check that the run shows Reconciled.

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