| Account Analysis
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| The Account Analysis service determines the account
balance required to avoid service charges, based on the account’s activity
level.
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| If the average balance in the account is equal or
greater than the required to compensate for the expenses incurred for the
services provided, the account will not be charged. However, if the average
balance in the account is lower than the required to compensate for the
expenses incurred for the services provided, the account will be charged. |
The interest rate applied to the average balance (Net
Investable Funds) is pegged to the prevailing Federal Reserve Discount Rate.
The cost applied to each activity is published on PNB's Products & Services
Brochure, and is specified on the account statement when the account is on
analysis.
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| When is an account placed in
Account Analysis? |
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1. When a corporate/correspondent bank requests availability of funds on its
deposits before PNB's customary holds. This change is subject to approval by
the Bank.
Types of availability: (i) 24 hours; (ii) 48 hours; (iii) 72 hours.
2. When a personal/corporate account has a significant volume of transactions
through the account that merits to be placed in account analysis.
3. When PNB provides special services that are not recorded by the system
automatically, but need its costs added normally.
The example below illustrates the analysis in a simplified way assuming the
following:
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Example 1:
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Average available
balance:
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$100,000.00
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Cost per check:
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$0.20
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Cost per deposit:
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$0.10
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Interest rate
applied to balance:
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5% per annum
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Number of checks
paid:
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120
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Number of
deposits made:
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50
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The analysis will be as follows:
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Cost not charged
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Income not paid
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| US$100,000 @ 5%
per annum:
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$416.67 |
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120 checks x
$0.20:
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$24 |
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| 50 deposits x $0.10:
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$5 |
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| Total Cost:
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$29 |
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The average available balance required to compensate for the cost not charged
($29) is $6,954.44. In this example, the account has a larger balance than the
minimum required, then the account will not be charged any service fee. As you
can see, the income not paid is larger than the cost not charged.
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Example 2:
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Average
available balance:
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$3,000
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Cost per check:
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$0.20
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Cost per deposit:
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$0.10
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Interest rate
applied to balance:
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5% per annum |
| Number of checks paid: |
120 |
| Number of deposits
made:
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50 |
The analysis will be as follows:
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Cost not charged
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Income not paid
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| US$100,000 @ 5%
per annum:
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$12.50 |
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120 checks x
$0.20:
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$24 |
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| 50 deposits x $0.10:
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$5 |
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| Total Cost:
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$29 |
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The minimum balance required to compensate for the cost not charged ($29) is
$6,954.44. However, the average balance on the account is $3,000 for the month,
therefore, the account will be charged $16.50 (the difference between the
income not paid and the cost not charged).
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| The concepts used for this analysis are clear. On a
monthly basis, the customer will receive the Account Analysis, together with
the account statement, indicating the unitary cost and a detail of the
activities on the account. |
| In reality, the analysis is more sophisticated than
these two simple examples, in the sense that other concepts are included: |
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1. The average available balance that is used to calculate the income not paid
includes the following calculation:
To calculate the Income Not Paid:
To the Average Current Balance during the month, Deduct Average Uncollected
Funds during the month.
Deduct Reserve requirements by the Federal Reserve = Net Investable Funds.
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To calculate the Income Not Paid, apply the interest
rate to the Investable Funds.
2. Other considerations have to be contemplated to the cost analysis:
To the Cost Not Charged
Add all interests that have been actually paid to the account
Add any other cost that have not been included in the Detail of Cost
Deduct all fees actually collected from the account.
= Net Cost
The Net Cost could result in a positive or negative value. If the Net Cost is
negative, then this amount should be added to the Income Not Paid. On the other
hand, if the Net Cost is positive, this total is deducted from the Income Not
Paid.
If the end result is a Net Loss, the account is charged for this amount or, if
it results in a Net Earning, nothing is charged to the account.
Please contact us for more information, or to apply for this service.
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