Overview

A time deposit is a simple investment that most commonly accrues a fixed interest rate payable at maturity. Global nomenclature for time deposits includes Certificates of Deposit (CDs), Guaranteed Investment Certificates and Term Deposits. Time Deposits tend to pay slightly higher interest rates compared to savings accounts, and the common model is to prohibit or discourage withdrawal prior to maturity date by imposing early withdrawal fees. Eagle does not offer specific processing for Time Deposits, but Eagle’s core fixed income functionality can easily be leveraged to handle these simple investments.

Reference Data

Eagle recommends modeling Time Deposits as bonds, which are single security master records. You can select one of two processing security types. If the Time Deposit is considered short-term, DBIBST should be used. If the Time Deposit is considered long-term, DBIBFD should be used. Selecting either processing security type will yield the same cash results, as the earnings process calculates yields, accruals, and amortization in the exact same manner. The main difference in terms of accounting is tax treatment. The two Processing Security Types will also yield different groupings on some reports.

• Payment Frequency = At Maturity
• Issue Price = 100
• 1^st Coupon Date = Maturity Date
• Last Coupon Date = Maturity Date
• Maturity Price = 100

Entity Setup

There are no specific settings for entities trading Time Deposits modeled as bonds. As most time deposits are purchased at par and therefore accrue only interest, no special amortization rules are required. Should the Time Deposit be purchased at a price other than par, Eagle’s core fixed income accounting will amortize the security to par at maturity if the entity utilizes an amortization rule other than NONE.

Trade Processing

Buy

Once the security reference and entity data is setup, trades can be entered using the Book Trade panel under the Trade tab. Trades will follow core accounting processes. Required fields are listed below.

• Trade Date
• Settlement Date
• Select Values to be Calculated by STAR
• Par Value/Current Face
• Price
• Broker

Mature

Time Deposits follow Eagle’s core maturity process. Use the Global > Global Process Center > Expirations > Mature panel.

• Set Maturity Processing Date equal to Maturity Date of the Time Deposit security
• To settle the principal and interest cash at maturity, use Global > Settlements > Contract Cash

Accounting

Once a Time Deposit position has been established it will follow all core Eagle Accounting processes.

Valuation

Price the Time Deposit security daily with a par-based price. Eagle Accounting calculates the security’s value by using the formula below:

• Market value = Par Value * Clean Unit Price * Price Multiplier * Quantity Scale)

Reporting

STAR to PACE (S2P)

Almost all reports in Eagle Accounting leverage data from Data Management, which is populated by the S2P process. This will be scheduled as part of the daily workflow, but can also be triggered manually as described in the Accounting section.

The S2P process creates a single row for each Time Deposit in the POSITION, POSITION_DETAIL, TRADE, and CASH_ACTIVITY tables. The MARKET_VALUE_INCOME column captures the total market value, inclusive of price fluctuations and period-to-date accruals payable or receivable.

Accounting Reports

Eagle has a core set of accounting reports that can be used to review Time Deposit information. These are designed to support the daily operational workflow for business users, allowing Grid Reports to be easily exported to Excel and customized to provide additional details as needed. Advanced Reports are intended to be client-facing and do not provide the same level of customization.

Data Management Reporting

General Reporting (Eagle OLAP)

OLAP reports provide the maximum level of customization, allowing any column in Data Management to be pulled into a report. These go beyond the Eagle Accounting Grid Reports because they are not limited by core queries, can support multiple sources and various types of calculations, and provide drill-down functionality based on user-defined groupings.

Performance

The performance toolkit has full functionality to calculate market value-based performance for Time Deposits using data supplied by the S2P process. Risk and performance attribution features are available to analyze Fixed-to-Float Bond performance.

Automation

Eagle supports loading Time Deposit SMFs and trades through standard Message Center streams. The SMF must be loaded prior to the trade (trades will not automatically spawn SMF records). Refer to Supported Generic Interfaces V17 for more information.