MIMICS Long Term Savings Account System Overview
MIMICS Long Term Savings Account (LSAs) System is a comprehensive management system for handling long term saving accounts, a special deposit instrument created by Parliament on June 1, 1999. The Government of Jamaica had introduced this Jamaican Dollar denominated tax-free account specifically for individuals.
Investment
An individual is allowed to invest up to a maximum amount per year in an LSA account as dictated by the Government of Jamaica. MIMICS LSA System tracks each individual’s deposits to their LSA account and monitors the investment limit. The system will check each new investment to check if it would exceed the limit in relation to the other investments done in that same year. The system also checks when the new LSA is approved, in case there were multiple pending LSAs.
Interest
The interest paid or credited to this account is not subjected to tax if the LSA is not encashed early. However, the MIMICS LSA System will retain the percentage of interest to be withheld in case the LSA is encashed early.
Early Encashment
MIMICS LSA System calculates the penalty deduction percentage on the income accrued on a long term savings account when an early encashment occurs. It calculates the amount to be retained for the Collector of Taxes and the amount of the accruing interest to be payable to the account holder.
New Investments
New investments are handled by the system as a new LSA transaction as opposed to contributing to an existing LSA Transaction. This is because each contribution is subject to the 5-year limit. However, all LSAs for one customer are tied together for annual limit checking.
Rates
Rates can pegged to an overall LSA rate in the case that all LSAs have the same rate, and that rate changes periodically. Set the peg whenever the rate changes, and the system automatically changes the rate on all of the trades.
Payment Schedule
The payment schedule can be set to “At Maturity” so that the system will not automatically disburse interest accrued on the LSA. If the Payment Schedule is changed, disbursements will automatically be created by system.
In addition, the system also allows interest to be manually withdrawn periodically. The system can allow the LSA Customer withdraw interest accrued at any time. The system can disallow the portion of the interest that would be withheld if the LSA is encashed early.
The user can define the allowable withdrawals. The interest amount paid out is based on the withdrawals that are allowed.
Reinvestment
The Compounding Schedule can be set periodically for example to default to “Quarterly”. In that case, every quarter the outstanding, un-withdrawn interest will be reinvested into the principal of the LSA.
Fees
Setting up fees for your customers through the MIMICS System is simple and straight-forward. The user can define different types of management fees to be charged for example periodic fees, interest withdrawal fees and early encashment fees. In addition, G.C.T. (Gross Consumption Tax) can be calculated and charged on the Management Fee.
Maturity
The user can define which actions will occur upon maturity of the LSA when the account is initially set up. Examples of actions are Rollover Principal and Interest, Rollover Principal, Reduce Principal and Do Not Rollover. The system allows this action to be changed after the LSA has been created, at any time before it matures.
Forms
Confirmations, statements, interest payment tickets, checks, advices and any other forms that you send to your customers are printed. These forms are designed to your specifications, and they can be printed with micr encoding.
Interfaces
By interfacing with the MIMICS Portfolio Management System you can fully utilize your portfolio securities. There is no need to have the collateral sit idle. The Portfolio System will make sure the collateral is not pledged elsewhere, e.g., to public funds deposits, so you cannot double or over pledge.
Additional Features
The system comes complete with full audit trail reporting and history posting. These are accessed through standard reports or through use of the on-board report writer. GL and DDA entries can be automatically transmitted to your mainframe GL and DDA systems.
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