Creating a Deposit Account
  • 10 Jan 2023
  • 4 Minutes To Read
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Creating a Deposit Account

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Article summary

Every deposit account you create in Mambu is an instance of a deposit product that has been created before. So, the terms that were set for the product will determine the new deposit accounts' terms and conditions.

This allows you to keep all your accounts organised by the products they belong to. Thus you'll be able to compare the performance of your organization's products in the Reporting section in Mambu.

Therefore, before you create a deposit account, make sure you have already set up deposit products.

Regular deposit accounts

There are different ways of creating a new deposit account for a client. You can either:

  1. Click on Create > Deposit Account on the top menu bar > enter all the account's details > click on Create Deposit Account.

Create button with options like Client, Group, Loan Account, Deposit Account and User

  1. Click on New Account > New Deposit Account on the right-hand side of the client's profile > enter all the account's details > click on Create Deposit Account.

Client Profile with New Account drop-down.

  1. Create an account using an API call.
POST /deposits

You can find further details about this call in our API documentation.

Please Note
After the account is created, it needs to be approved before you can start logging transactions. After the first deposit is made, the account becomes active.
Please Note
For Savings Plan and Fixed Deposits, the interest will start being accrued as soon as the account becomes active, even if the maturity period hasn't been activated yet.

Maximum withdrawal amount

Maximum amount that can be withdrawn in one transaction. Please note this is a limit per one withdrawal transaction as opposed to the overall overdraft limit which is defined in the Overdraft limit section.

Recommended deposit amount

In Savings Account or Savings Plan products, you can determine if there should be a recommended deposit. The amount entered here only serves as a guideline and not as a constraint. The client will still be able to make deposits that fall under or above this value.

Withholding tax source

It is a regulatory requirement in many countries that organizations offering deposit accounts have to pay taxes on the interest generated by those accounts and paid to clients. These are generally called withholding taxes because they are deducted from the interest paid to the client.

Withholding tax can be enabled only when:

  • The Interest paid into account checkbox is selected.
  • Interest calculation method with positive interest rate is selected.

Once you enable withholding taxes, you must specify the actual applicable withholding tax source when you open a new deposit account. To do so:

  • In the Deposit Account Terms section of the Creating a New Deposit Account form, under Withholding Tax Source, select the source you want to use for your deposit account from the list of existing sources previously defined under Administration > Financial Setup > Rates. For more information, see Customizing Index Interest Rates & Tax Rates.

If you decide to change the withholding tax source after the account is active, you may do so via API v2 by making a POST request to the /deposits/{depositAccountId}:changeWithholdingTax endpoint.

Please Note

During the lifecycle of the deposit account, you can remove the withholding tax source via API v2 using an empty string like:
{ "withholdingTaxSourceKey": "" }
Moreover, the changes made to the withholding tax source are stored and the history is available via GET /deposits/{depositAccountID}/withholdingtaxes?from=&to=&.

After interest is applied on the account, Mambu will post a Withholding Tax transaction on the account, that will subtract the tax percentage of the applied interest, from the account balance.

Please Note
  • The Apply Withholding Taxes option can be disabled even if there are accounts opened using the product. If taxes are disabled, new accounts won't have applicable taxes, but the old accounts will retain them.
  • If the product has accounting enabled, then a "Taxes Payable" Liability GL Account has to be linked and will be used for booking the amount of taxes withheld and for the government.
  • The tax percent, source name, and amount are available as placeholders in your contracts, receipts and templates.

Deposit accounts with overdraft limits

To create a new deposit account with an overdraft limit you need to follow the same steps as for any other deposit account and then add the specific terms for the overdraft.

Overdraft limit

This is the maximum amount a client will be able to withdraw from the overdraft account. The overdraft limit defined for a given account cannot be lower than the limit specified in the product setup constraints. The balance of the account can still go beyond this limit in case there's interest or fees added to it.

Overdraft interest rate

This option refers to overdraft products using fixed interest rate. This is the interest rate that will be charged if the account has a negative balance.

Overdraft interest spread

This option refers to overdraft products using index interest rate. This spread will be added to the index rate and the total will define the Overdraft Interest Rate that will be charged if the account has a negative balance. The interest spread can be customized at each account level within the limits defined in the product setup. Additionally, interest spread can still be changed when the account is active, by adjusting the overdraft conditions.

Please Note

When a deposit is made to an overdraft account, interest will be paid first.

Expiry date

After this date no more withdrawals will be possible and the account will be set to In Arrears if it remains negative.

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