# Overdraft Product

Beginning at the main screen, select **Admin**, then **Products** from the drop-down menu. This will launch the **Products** menu.

**Overdraft should be defined in the Savings product itself by enabling Overdraft allowed as shown in the illustrations below.**&#x20;

Select **Savings Products.** &#x20;

### Create Savings Product&#x20;

### Details

Please refer above **Details - Image**, Details mentioned above are updated with respect to the provided fields numbers.  &#x20;

* 1 - Provide Overdraft **Product name**.
* 2 - Provide **Short name**.&#x20;
* 3 - Provide **Description** of this product.

### Currency&#x20;

* 4 - Select **Currency**. Need to have defined required currency: Currency Configuration
* 5 - Provide **Decimal places**.&#x20;
* 6 - Provide **Currency in multiples of**. This is to provide total rounding off amount. For example: 10, so Total amount gets rounded of to 10's. &#x20;

### Terms

* 7 - Provide **Nominal annual interest** (Rate of interest) - Will calculate the interest on the positive balance. &#x20;
* 8 - Select **Interest compounding period.** For more information refer: Savings Interest Calculation and Posting\
  &#x20;     Daily \
  &#x20;     Monthly\
  &#x20;     Quarterly \
  &#x20;     Semi-Annual \
  &#x20;     Annually&#x20;
* 9 - Select **Interest posting period** - Interest get posted for the selected frequency period.  For more information refer: Savings Interest Calculation and Posting\
  &#x20;     Monthly \
  &#x20;     Quarterly \
  &#x20;     Semi-Annual \
  &#x20;     Annually&#x20;
* 10 - Select **Interest calculated using.** For more information refer: Savings Interest Calculation and Posting\
  &#x20;       Daily Balance \
  &#x20;       Average daily balance&#x20;
* 11 - Select **Days in year** - depending upon your financial days in a year practice.  \
  &#x20;      365 Days\
  &#x20;      360 Days

### Settings - Enabling overdraft

**Skip to 19:**&#x20;

*12 to 18 are the other fields which are required for creating - Savings Products, you can ignore and skip to 19.* &#x20;

* 19: Checking the check box enables Overdraft allowed and opens up new fields: 19-a, 19-b and 19-c.&#x20;
* 19-a: **Maximum Overdraft amount limit** - Set overdraft limit amount here, example: 100000 where an overdraft cannot be crossed with this set limit.&#x20;
* 19-b: **Nominal annual interest for overdraft** - Provide annual rate of interest. Will calculate the interest on the negative balance, that is, on the overdraft amount.&#x20;
* 19-c: **Min Overdraft Required For Interest calculation** - Provide in case you want to provide minimum overdraft required for interest calculation.&#x20;

### Charges

In order to use Add charge, you should have already defined it in charges. For more information on charges refer here: Charges&#x20;

### Accounting&#x20;

![](https://mifosforge.jira.com/wiki/download/attachments/112296090/Capture%2062.PNG?version=1\&modificationDate=1484288954668\&cacheVersion=1\&api=v2)

**By default Accounting will be disabled - None:-** Meaning If you are using this product for various transactions like deposits, withdrawals, etc. These transactions are not passed in journal entry.  \\

**Enabling accounting for the savings product**:->> You should have created chart of accounts, for more information refer:>> To enable Accounting, you need to select cash accounting. As of now, Mifos x supports only cash accounting for savings product.&#x20;

* &#x20;     Cash

\>> Map accounts with respect to the savings product accounts. For information on these accounts refer: A Possible accounting Spec - Accounting rules for savings.

### **Advanced Accounting Rule**&#x20;

On clicking on the show button, it enables Advanced accounting rule.&#x20;

If you click on Add button, it will expand and show up selection drop-downs.&#x20;

* Configure Fund sources for Payment Channels. \
  Example: In the image shown above, Payment type - Cheque is mapped to Fund source - Bank. So whenever payment type is used for transaction. Journal entry for Account - Bank will be passed.&#x20;
* Map Fees to Income Accounts.&#x20;
* Map Penalties to Specific Income Accounts

**Click on Submit button to Save/Create savings product.**

<div align="left"><img src="https://mifosforge.jira.com/wiki/download/attachments/112296090/Capture%2065.PNG?version=1&#x26;modificationDate=1484289120645&#x26;cacheVersion=1&#x26;api=v2" alt=""></div>

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