Specifying Fee Period Basis

2.2.4 Specifying Fee Period Basis

During fee accrual calculation, you can choose fee period basis to compute number of days for the fee schedule based on the option chosen during contract life cycle.

You can select the tenor basis upon which fee is computed over a schedule or fee period for a contract. You can select an option in while defining fee components for a product and the same is inherited to the contract. If required, you can change the default option.

You can select any of the following options:

Including the From Date - For all schedules, the period considered for fee calculation includes the start date and exclude the end date. Therefore, the value date of the loan is considered for fee calculation and the maturity date is excluded.
Including the To Date - For all schedules, the period considered for fee calculation excludes the start date and include the end date. Therefore, the value date of the loan is excluded, but the maturity date is included for fee calculation.
Including both From and To Dates - The period considered for fee calculation includes both the value date and the maturity date. This means the following:
- For the first schedule, it includes the value date. Fee is calculated for the value date.
- For the last schedule, it includes the maturity date.
- Fee is calculated for the maturity date
Excluding both From and To Dates - The period considered for fee calculation excludes both the value date and the maturity date. This means the following:
- For the first schedule, it excludes the value date. No fee is calculated for the value date.
- For the last schedule, it excludes the end date. No fee is calculated for the maturity date

Example

A loan with a value of USD 400,000 is value dated 1st January 2019 and matures on 1st May 2019. The intermediate fee payment schedules are on 1st February 2019, 1st March 2019 and 1st April 2019.

Schedule	Start Date	End Date
1	1st January 2019 (Value Date)	1st February 2019
2	1st February 2019	1st March 2019
3	1st March 2019	1st April 2019
4	1st April 2019	1st May 2019 (Maturity)

The periods considered for fee calculation for each schedule, for each of the four options, are arrived at as given below:

Include From Date

Schedule	Days from	Days To	Days for Fee Calculation
1	1st January 2019 (including)	1st February 2019	31
2	1st February 2019	1st March 2019	28
3	1st March 2019	1st April 2019	31
4	1st April 2019	1st May 2019 (excluding)	30

Include To Date

Schedule	Days from	Days To	Days for Fee Calculation
1	1st January 2019 (excluding)	1st February 2019	31
2	1st February 2019	1st March 2019	28
3	1st March 2019	1st April 2019	31
4	1st April 2019	1st May 2019 (including)	31

Include both From and To Dates

Schedule	Days from	Days To	Days for Fee Calculation
1	1st January 2019 (including)	1st February 2019	31
2	1st February 2019	1st March 2019	28
3	1st March 2019	1st April 2019	31
4	1st April 2019	1st May 2019 (including)	31

You can notice that consequent to the first schedule, this option works in the same manner as the Include To Date option.

Exclude From and To Dates -

Schedule	Days from	Days To	Days for Fee Calculation
1	1st January 2019 (excluding)	1st February 2019	30
2	1st February 2019	1st March 2019	28
3	1st March 2019	1st April 2019	31
4	1st April 2019	1st May 2019 (excluding)	30

You can notice that consequent to the first schedule, this option works in the same manner as the Include From Date option.

Parent topic: Defining fee components for a product