EP1281147A1

EP1281147A1 - Data processing system for financial product

Info

Publication number: EP1281147A1
Application number: EP01928061A
Authority: EP
Inventors: James Mcinally Spowart; Julia Margaret Mcclelland; Andrew Blatchford
Original assignee: Intelligent Finance Software Ltd
Current assignee: Intelligent Finance Software Ltd
Priority date: 2000-05-04
Filing date: 2001-05-04
Publication date: 2003-02-05
Also published as: AU5492801A; GB0111009D0; WO2001084386A2

Description

Data Processing System for Financial Product

The present invention relates in general to a financial product, and in particular to a data processing method and an associated computer system for administering an integrated financial product. A key function of the software and hardware is to calculate interest on a financial product.

One type of financial product which has become popular in recent times, are so-called Australian style mortgages, where a mortgage and a current account are combined into one financial product. The net current account assets and mortgage debts of the customer are offset and then used to calculate a single interest payment. The benefit of this to the consumer is that their current account balance is offset against their mortgage debt.

Therefore, they effectively have a current account which pays interest at the interest rate of their mortgage, which is usually higher than the interest rate on a standard current account. Financial services providers also benefit from this type of product, due to the economy of scale and ease of administering these multiple products through a single package.

However, banks and building societies provide a large number of different financial services to customers. For example, they may have savings accounts, current accounts, notice accounts, secured mortgage debts, unsecured fixed term loans, unsecured overdrafts, tax planning schemes, such as ISAs and TESSAs, insurance policies, endowment policies, all of which may have different interest rates, different notice terms and different terms and conditions.

Due to the range of different types of product available, many consumers do not use them optimally and pay more interest than they need to. For example, they might have savings assets in one place and mortgage debits in another place. It would be highly beneficial to consumers to be able to provide them with a method of offsetting their assets and debts in different product categories to reduce their costs.

However, given the variety of different financial products, the range of terms and conditions which are required, the different interest rates, different notice periods and further features of all these different products, the basic combination of current account and mortgage known in the prior art is lacking in sophistication and it is an aim of the present invention to deliver a unified financial product integrating these diverse product types. For instance, in July 2000, Woolwich® Open Plan Offset account provided the ability to offset the balance of more than one asset account (i.e. a current account and a savings account) against loan products (e.g. an overdraft and a mortgage) at the same interest rate. However, this does not provide an account having multiple loans at different interest rates and with different notice periods .

An especial problem is incorporation of a credit card or similar loan product into an offsetting account. A credit card typically involves a period which may or may not be interest free - depending on whether a balance is paid off by a particular time. Therefore, it is not apparent how this type of loan could be incorporated into an offset account as there is no obvious method to calculate what interest would or should be payable on a given day or month when future actions will affect the interest which should be payable. Nor is it apparent how standard banking core systems for credit cards and for other financial products such as current account could work together to administer this type of account.

For example, the Woolwich Open Plan Offset website http: //www, openplan. co.uk/offset/om faq.html on 29^th June 2000 advises its customers as follows:

Question: "If I use my Woolwich credit card, how do I get the debt onto the cheapest rate/mortgage equivalent?"

Answer: "By clearing your credit card balance from your Open Plan current account, and drawing down against the secured Current Account Reserve (Overdraft) " Therefore, a customer's credit card balance, which typically has a different interest rate to the mortgage product cannot be offset against the balance of their mortgage. Instead, additional transactions between a customer's current and credit card accounts must be carried out to avoid non-optimal distribution of assets between accounts.

The aim of the present invention is to provide a data processing system which allows for the provision of a financial services product integrating different types of financial products, particularly those with different interest rates and notice periods, whilst allowing consumers to offset their assets against their debts and reduce the cost of the account to them. This would be highly beneficial to consumers and would also have economy of scale benefits for financial organisations, enabling them to offer lower interest rates which they can pass on to their customers.

The invention further recognises that banking software applications are highly complex. It is impractical to write such an application from scratch and, typically, such applications are prepared by customising already known banking core applications. The present invention also aims to provide apparatus and methodology for implementing an integrated financial product using a plurality of legacy core financial product applications.

According to a first aspect of the present invention there is provided a computer system for administering a financial product, the financial product comprising at least one credit jar upon which interest is paid to a customer at an interest rate and at least one debit jar upon which interest is payable by the customer at an interest rate, the system comprising:

a plurality of core systems for administering and processing transactions relating to particular jars;

a transaction file comprising information relating to recent transactions processed by at least one core system;

means for calculating the balances of each jar from the information contained in a or each transaction file;

an interest calculation means adapted to calculate interest for charging or paying to a customer;

wherein the interest calculation means takes into account the balance of at least two jars processed by different core systems.

Preferably, the interest calculation means calculates a single interest charge or payment pertaining to the whole financial product.

More preferably, a single transaction file comprises information about each jar.

Preferably also, the computer system further comprises translation means for converting transaction information from different core systems into a single transaction file format.

Preferably also, the computer system further comprises a core system instruction means adapted to send instructions relating to transactions to one or more core systems.

More preferably, the core system instruction means stores balance information relating to jars administered by more than one core system.

Typically, the core system instruction means communicates with a printing means for printing a statement.

Preferably, the core system instruction means can action money transfers between jars same day and is adapted to display or print statements taking into account said money transfers the same day as the transfer has taken place.

Preferably, the interest calculation means takes into account the balance of a plurality of jars when calculating interest.

Preferably also, the interest calculation means allows a choice of different method of calculating interest taking into account the balance of a plurality of jars.

The interest calculation means may calculate interest by: (a) offsetting the credit balance of the credit jar or jars against the debit balance of the debit jar or jars in a calculated order; ^' (b) calculating the interest due on the balances of the debit jars after offsetting at the particular interest rate of the particular debit jars and calculating the interest payable on the balances of the credit jars after offsetting at the particular interest rate of the particular credit jars; and (c) outputting or applying to a jar the calculated interest due and the calculate interest payable.

Preferably, in one interest calculation process the balance of the credit jar on which the financial service provider pays the lowest interest rate is offset first against the balance of the debit jar on which the financial service provider charges the highest interest rate and then against the balance of other debit jars in descending order of interest rate.

Typically, the balance of any further credit jars in order of increasing interest rate is then offset against debit jar balances in the same way, in ascending order of interest rate paid by the financial service provider.

If two or more credit or debit jars have the same interest rate, their balances may be used for offsetting in the order in which they were opened by the customer.

Preferably, credit and debit jars of equal notice period are offset against each other.

The offsetting process stops when the next credit balance in order has a higher interest rate than that paid on the next debit balance in order. The offsetting process may stop when the next debit balance reached has the same or lower interest rate than the next credit balance.

In another interest calculation process, the interest calculation means calculates interest by (a) capitalising the debit balances of the debit jar or jars against the credit balances of the credit jar or jars in a calculated order so as to calculate an amount of the credit balance which to be paid interest at the debit interest rate; (b) calculating the interest payable to the customer on the capitalised balances of the credit jars at the particular interest rate of the particular capitalised debit_. jars; (c) calculating the interest payable by the customer on the debit balances of the debit jars at the particular interest rates of the particular debit jars and; (d) outputting or applying to a jar the interest due to the customer and outputting or applying to a jar the interest payable by the customer.

Preferably, the balance of the credit jar on which the financial service provider charges the lowest interest rate is capitalised first against the balance of the debit jar on which the financial service provider charges the highest interest rate and then against the balance of other debit jars in descending order of interest rate.

Preferably, the financial product comprises at least three jars. Preferably, the balance of any further credit jars is then capitalised against debit jar balances in the same way, in ascending order of interest rate paid by the financial service provider.

Typically, if two or more credit or debit jars have the same interest rate, their balances are used for capitalising in the order in which they were opened by the customer .

Credit and debit jars of equal notice period may be capitalised against each other.

The capitalising process preferably stops when the next credit balance in order has a higher interest rate than that paid on the next debit balance in order.

The capitalising process may stop when the next debit balance reached has the same or lower interest rate than the next credit balance.

Typically, the capitalising process stops when all the credit balances have been capitalised against debit balances.

According to a second aspect of the present invention there is provided a method of calculating the interest to be paid on a financial services product comprising at least three jars selected from at least one credit jar upon which interest is paid to a customer and at least one debit jar upon which interest is payable by the customer, the method comprising the steps of: (a) offsetting the credit balance of the credit jar or jars against the debit balance of the debit jar or jars in a calculated order; (b) calculating the interest due on the balances of the debit jars after offsetting at the particular interest rate of the particular debit jars and calculating the interest payable on the balances of the credit jars after offsetting at the particular interest rate of the particular credit jars; and (c) outputting or applying to a jar the calculated interest due and the calculate interest payable.

Preferably, the balance of the credit jar on which the financial service provider pays the lowest interest rate is offset first against the balance of the debit jar on which the financial service provider charges the highest interest rate and then against the balance of other debit jars in descending order of interest rate.

More preferably, the balance of any further credit jars in order of increasing interest rate is then offset against debit jar balances in the same way, in ascending order of interest rate paid by the financial service provider.

Preferably, if two or more credit or debit jars have the same interest rate, their balances are used for offsetting in the order in which they were opened by the customer.

Credit and debit jars of equal notice period may be offset against each other. The offsetting process preferably stops when the next credit balance in order has a higher interest rate than that paid on the next debit balance in order.

Typically, the offsetting process stops when the next debit balance reaches has the same or lower interest rate than the next credit balance.

Preferably, the offsetting process stops when all the credit balances have been offset against debit balances.

According to a third aspect of the present invention there is provided a method of calculating the interest to be paid on a financial services product comprising at least three jars selected from at least one credit jar upon which interest is paid to a customer and at least one debit jar upon which interest is payable by the customer, the method comprising the steps of: (a) capitalising the debit balances of the debit jar or jars against the credit balances of the credit jar or jars in a calculated order so as to calculate an amount of the credit balance which to be paid interest at the debit interest rate; (b) calculating the interest payable to the customer on the capitalised balances of the credit jars at the particular interest rate of the particular capitalised debit jars; (c) calculating the interest payable by the customer on the debit balances of the debit jars at the particular interest rates of the particular debit jars; and (d) outputting or applying to a jar the interest due to the customer and outputting or applying to a jar the interest payable by the customer.

Preferably also, the balance of any further credit jars is then capitalised against debit jar balances in the same way, in ascending order of interest rate paid by the financial service provider.

Typically, if two or more credit or debit jars have the same interest rate, their balances are used for capitalising in the order in which they were opened by the customer.

Typically also, credit and debit jars of equal notice period are capitalised against each other.

Preferably, the capitalising process stops when the next credit balance in order has a higher interest rate than that paid on the next debit balance in order.

Preferably, the capitalising process stops when the next debit balance reaches has the same or lower interest rate than the next credit balance. Typically, the capitalising process stops when all the credit balances have been capitalised against debit balances.

According to a fourth aspect of the present invention there is provided computer software comprising program code means which, when loaded into a computer, cause it to perform as the interest calculation means of the first aspect.

According to a fifth aspect of the present invention there is provided computer software comprising program code means which, when loaded into a computer, cause it to perform the method of the second or third aspects.

According to a sixth aspect of the present invention there is provided a data handling system suitable for establishing interest to be paid or payable on a financial product, the financial product having at least three jars, each jar having a balance and an interest rate associated therewith, the data handling system comprising:

a data storage means suitable for storing data representing balances of jars or data from which balances of jars can be calculated;

offsetting means which, in use, read out and offset the balances of jars with credit balances, in ascending order of interest rate, against balances of jars with debit balances in descending order of interest rate; and interest calculation means which calculate a sum of interest to be paid or payable by summing the interest to be paid or payable on the offset balances of individual jars at the interest rate of each said jar.

According to a seventh aspect of the present invention there is provided a data handling system suitable for establishing interest to be paid or payable on a financial product, the financial product having at least three jars, each jar having a balance and an interest rate associated therewith, the data handling system comprising:

capitalising means which, in use, read out and capitalise the balances of jars with credit balances, in ascending order of interest rate, against balances of jars with debit balances in descending order of interest rate; and

interest calculation means which calculate a sum of interest to be paid or payable by summing the interest to be paid or payable on the capitalised balances of individual jars at the interest rate of each said jar. Preferably, if two or more credit or debit jars have the same interest rate, their balances are used for capitalising in the order in which they were opened by the customer.

According to an eighth aspect of the present invention there is provided an integrated financial product comprising a plurality of jars, at least one jar being a credit jar upon which interest is to be paid to the financial product owner and at least one jar being a debit jar upon which interest is to be paid by the financial product owner, a single interest payment to or from the financial product owner being calculated on the balances of each credit and debit jar, characterized in that:

two credit jars or two debit jars have different interest rates associated therewith.

Preferably, a customer has a choice of interest calculation method.

In one method, interest may be calculated by:

(a) offsetting the credit balance of the credit jar or jars against the debit balance of the debit jar or jars in a calculated order; (b) calculating the interest due on the balances of the debit jars after offsetting at the particular interest rate of the particular debit jars and calculating the interest payable on the balances of the credit jars after offsetting at the particular interest rate of the particular credit jars; and (c) outputting or applying to a jar the calculated interest due and the calculate interest payable.

Credit and debit jars of equal notice period may be offset against each other.

Typically, the offsetting process stops when the next credit balance in order has a higher interest rate than that paid on the next debit balance in order.

Preferably, the offsetting process stops when all the credit balances have been offset against debit balances. In an alternative method, interest may be calculated by:

(a) capitalising the debit balances of the debit jar or jars against the credit balances of the credit jar or jars in a calculated order so as to calculate an amount of the credit balance which to be paid interest at the debit interest rate; (b) calculating the interest payable to the customer on the capitalised balances of the credit jars at the particular interest rate of the particular capitalised debit jars; (c) calculating the interest payable by the customer on the debit balances of the debit jars at the particular interest rates of the particular debit jars; and (d) outputting or applying to a jar the interest due to the customer and outputting or applying to a jar the interest payable by the customer.

Typically, the balance of any further credit jars is then capitalised against debit jar balances in the same way, in ascending order of interest rate paid by the financial service provider. Typically also, if two or more credit or debit jars have the same interest rate, their balances are used for capitalising in the order in which they were opened by the customer.

Preferably, credit and debit jars of equal notice period are capitalised against each other.

Typically, the capitalising process stops when the next credit balance in order has a higher interest rate than that paid on the next debit balance in order.

The capitalising process preferably stops when the next debit balance reaches has the same or lower interest rate than the next credit balance.

The capitalising process may stop when all the credit balances have been capitalised against debit balances.

Examples of the present invention will now be described with reference to the following Figures in which:

Figure 1 is a schematic diagram of a system for managing a financial product; and

Figure 2 is a schematic diagram of a prior art system for managing a financial product.

Within this Application, the term "jar" is used to refer to a unit of a financial product having an asset value and generating a cost to the customer (such as a fixed charge or interest payment) or a benefit (such as the payment of a sum of capital or interest) based upon a value of said jar. Example jars are current accounts, savings accounts, mortgages, unsecured loans, overdrafts, ISAs, TESSAs etc. which may have fixed or variable interest rates and may or may not have notice periods and other properties.

Credit jars are those upon which interest is paid from the financial service provider to the customer and debit jars are those upon which interest is paid from the customer to the financial service provider. Jars may also be provided which can have credit or debit balances. These jars are treated as credit or debit jars depending on whether interest is payable to the customer or financial service. Virtual jars which can be converted from credit to debit and vice versa are considered as part of interest calculation method B.

"Offset" and "Capitalise" and related words refer to two different methods, A and B described below, of calculating an interest payment given the balances, interest rates and any other properties of a plurality of jars.

Within this document the term "netting" is used to refer to any process for calculating interest based on the balances of a plurality of jars. Therefore, within this document, the term "netting" includes both "offsetting" and "capitalising".

The present invention provides a financial product and a method of calculating and applying interest on a financial product which enables a customer to retain a plurality of jars with different interest rates and notice terms. One benefit of the product is that a single "container" product comprises a plurality of jars, enabling a variety of financial products to be simply packaged for the customer. These products may have different properties such as different interest rates, different notice periods etc.

^• Figure 1 illustrates functional components of a system 10 for administering a financial product. A customer 20 interacts with a front end 30 via a technological communication means. The technological communication means may be, for example, an internet terminal or a WAP enabled mobile telephone. In another example, it could be a standard telephone through which the customer interacts with a customer service assistant who communicates directly with the front end 30 for or in parallel with the customer. The front end comprises an interface 31 to the remainder of the system and further interfaces 32, 33 for communicating with internet customers and financial advisers. A separate interface 34 can be provided for telephone operators. The front end is implemented as a plurality of Windows NT® servers.

The front end 30 communicates with a software and hardware system referred to as the mid tier 40. The mid tier interacts with the customer through the front end. The mid tier retains customer related information such as name, address and security info and can provide information to the customer such as a summary of their balance and recent statements. The mid tier is implemented as UNIX and Windows NT® servers and major components include a workflow engine 41 for order/application management, a customer data centre 42 1 which implements statements, documentation and online

2 services; and a workflow engine 43 for offline service

3 request management.

4.

5 The mid tier interacts with a plurality of banking core

6 systems illustrated here as 50 through 54. Banking core

7 systems are standard banking systems which administer key

8 functions of accounts and their interaction with other

9 devices, for example through ATMs or interbank 0 transactions through BACS. Banking core systems 1 implement single accounts such as a current account 50, 2 personal loan 51, mortgage 52, savings account 53 and 3 credit card 54. Banking core applications are highly 4 complex constructions and a further aim of the present 5 invention is to allow standard core applications to be 6 used in providing the balance netting financial product. 7 Indeed, a further aim is to allow stripped down versions 8 of standard core systems to be used, making it easier, 9 quicker and cheaper to implement the system 10. 0 1 Here, different core systems implement different elements 2 of the financial plan. For example, a current account 3 core system 50 can be used alongside a separate credit 4 card core system 54. A third core system may deal with 5 savings, loans and mortgages although such core systems 6 are usually provided as three separate systems 51, 52 and 7 53. This architecture fits in well with prior art 8 systems where banking core systems administer a single 9 account or single type of account. Traditional core 0 applications calculate interest on the product to which 1 they relate and this is disabled in this example. 2 Banking core systems 50-54 write information into a shared transaction database 70 through translators 60 to 64. A balance netting system 80 uses information from the transaction file 70 to calculate the correct balances to use in balance netting and then to apply balance netting. The balance netting system 80 then overwrites the transaction file 70, including new interest information.

The transaction database 70 comprises a core transaction table 71 which stores the relevant transaction information responsive to live feeds from each core system. This shared database also includes some customer account data 72 replicated from storage in the mid tier 40 and stores for collection and sort codes 73 and expectations 74.

Typically, the balance netting system 80 will be activated at a particular monthly statement date ("interest apply date") for a given customer. This monthly statement date is the day on which interest is actually calculated and, typically, upon which other payments such as mortgage payments and personal loan payments payments are due.

The balance netting system 80 uses the historical information from the transaction file 70 to calculate, by known techniques, daily balances for the past month. Every transaction which has taken place since the last interest apply date is looked at individually and it is thereby calculated what the account balance was on each day and, using balance netting, what interest was payable on that day. Interest is typically applied/charged monthly but calculated on a daily basis.

The banking core systems, transaction files, balance netting and information about client accounts held by the mid tier are updated by a series of scheduled batch processes which take place overnight in a fixed order. Balance netting is one of the earlier processes in this sequence.

In conventional banking systems and known web banking systems individual banking core systems are used to operate individual financial products separately in parallel as shown in Figure 2. In Figure 2, it is known to have a web interface 140 which can provide access to information from more than one banking core system 150, 151, 152. Each prior art banking core system would typically have its own transaction file 170, 171, 172 and its own interest calculation system 180, 181, 182. The present invention, however, provides a balance netting system 80 able to access information from a plurality of core systems 51 to 55 meaning that the product can be implemented using separate legacy banking core systems rather than having to try to adapt a single banking core system to encompass e.g. a current account and a mortgage.

Core systems, the shared databases and balance netting module can be implemented in a single mainframe architecture 100. Communications paths 110 are provided to allow different parts of the system to communicate information to each other when required. The financial product might include further core systems, such as a module for implementing accident, sickness and unemployment cover, which are still presented as part of the integrated financial product but which are not involved in balance netting.

The mid tier 40 in the present invention has two additional important properties. Firstly, it has the ability to carry out live transactions with individual core systems 51 to 54. For example, a request to transfer a sum of money from a current account operated on one banking core system to a savings account operated on a second banking core system would, in the prior art, be accomplished by a front end issuing a request to the current account banking core system to transfer a sum of money to the savings account in the overnight batch process. Therefore, the actual transfer would not be accomplished until overnight and, importantly, the transfer will not show on statements read by the customer until the next day.

However, the mid tier 40 in the present invention can- instruct two different banking core systems that a transaction is to take place in real time and can update its own internal records (updated also from the transaction file) and so can present information about the transaction to the customer, meaning that they can see in printed statements immediately that particular transfers have been accomplished.

The mid tier 40 can also instruct a printer 90 to print a statement for the customer. In prior art systems this would have been a function of the banking core systems only and could not have shown transactions until the working day after the transaction was actioned by the customer.

The second, related, important property of the mid tier 40 is that it can present unified information about all the different jars held by a customer within the financial product.

In an alternative embodiment, balance netting is carried out on account information stored within the mid-tier. This information need to comprise at least enough information about the financial value of transactions relating to all jars to enable daily balances to be calculated in retrospect. In this embodiment, the balance netting program acts on this mid-tier account information and calculates an interest amount payable or to be paid. As the mid-tier can make instructions to carry out transactions to the core applications 5 this interest payment or deduction can be made on the appropriate jar. A benefit of having the balance netting carried out in the mid-tier is that it becomes easier to show customers the effects that balance netting has on their account as the capacity to make the detailed interest calculation is present in the part of the overall system with which the clients can interact.

The balance netting method applied by the balance netting system 80 is now described:

BALANCE NETTING PROCESS - EXAMPLE METHOD

A customer holds a balance on each jar that they own. These balances can be credit i.e. saved with The financial service provider, or debit i.e. owed to the financial service provider.

Some balances from balance netting may be excluded by virtue of exclusion rules.

Balance netting will only occur where there are at least one non-zero credit balance and at least one non-zero credit balance.

Each debit balance attracts a debit interest rate.

Each credit balance attracts a credit interest rate.

The customer can select an interest netting option: Option A or Option B. Option A is referred to as offsetting. Option B is referred to as capitalisation. The term netting refers to both offsetting and capitalisation.

In fact, offsetting and capitalization produce the same total interest charge or payment to the consumer. However, as Option A (offsetting) will effectively reduce credit account balance to zero for customers with greater borrowings than credit and so they will not be liable for tax on earned interest. Option B (capitalisation) does, however, provide interest posting against all accounts which can be preferred when a single account has multiple jars owned by different people. If the total of the debit balances is higher than the total of the credit balances, net the credit balances against the debit balances starting with the highest debit interest rate first, then move onto the next highest debit interest rate, and so on.

If the total of the credit balances is higher than the total of the debit balances, net the debit balances against the credit balance starting with the lowest credit interest rate first, then move up to the next lowest credit interest rate, and so on.

If there are a number of jars (or sub jars) within the plan at the same interest rate,- net the balances against the first jar (or sub jar) at that rate in the order that the jars (or sub jars) at that rate have been created (i.e. in order of account creation date and time) .

If the debit interest rate on the debit balance is equal to or lower than the credit interest rate on the credit balances, then the balances/rates will not be netted for interest purposes.

Any balances remaining after this netting will be charged/applied at the appropriate interest rate.

The method will now be illustrated in depth in the form of pseudo-code.

Method

Step 1 - Arrange the balances

The set of credit balances are arranged in ascending order of creation within ascending credit interest rate order to form the Set of Credit Balances.

The set of debit balances are arranged in ascending order of creation within ascending debit interest rate in order to form Set of Debit Balances. Step 2 - Total balances

Total the credit balances to get the Total Credit Balance figure.

Total the debit balances to get the 7 ta/ Debit Balances figure.

Step 3 - Net the balances

Net the balances based on Option A rules or Option B rules based on customer preference.

Step 3.a - Offset the balances based on Option A rules

If Total Credit Balances is less than or equal to Total Debit Balances, offset the Sef of Credit Balances against the Set of Debit Balances in the following manner:

Taking each Credit Balance from the Set of Credit Balances in turn, starting with the lowest credit interest rate ...

Repeat

Set the Remaining Credit Balance figure equal to the amount of the current Credit Balance.

Set the Current Credit Rate figure equal to the credit interest rate of the current Credit Balance. Repeat

Locate the non-zero Debit Balance with the highest debit interest rate greater than the Current Credit Rate

If one was found

If the Remaining Credit Balance is greater than or equal to the amount of the Debit Balance, reduce the Remaining Credit Balance by the amount of the De Balance. Set the amount of the Debit Balance to zero.

If the Remaining Credit Balance is less than the amount of the Debit Balance, reduce the amount of the Debit Balance by the Remaining Credit Balance. Set the Remaining Credit Balance to zero.

If the Remaining Credit Balance is zero or a non-zero Debit Balance with a debit interest rate greater than the Current Credit Rate cannot be found.

If the Remaining Credit Balance is not equal to the amount of the current Credit Balance

Set the amount of the current Credit Balance equal to the Remaining Credit Balance.

Until Remaining Credit Balance is zero or a non-zero Debit Balance with a debit interest rate greater than the Current Credit Rate cannot be found Until there are no more Credit Balances from the Set of Credit Balances to offset.

If Total Credit Balances is greater than Total Debit Balances, offset the Set of Debit Balances against the Set of Credit Balances in the following manner:

Taking each Debit Balance from the Set of Debit Balances in turn, starting with the highest debit interest rate ... Repeat

Set the Remaining Debit Balance figure to the amount or the current Debit Balance.

Set the Current Debit Rate figure equal to the debit interest rate of the current Debit Balance.

Repeat

Locate the non-zero Credit Balance with the lowest credit interest rate lower than the Current Debit Rate. If one was found

If the Remaining Debit Balance is greater than or equal to the amount of the Credit Balance, reduce the Remaining Debit Balance by the amount of the Credit Balance. Set the amount of the Credit Balance to zero.

If the Remaining Debit Balance is less than the amount of the Credit Balance reduce the amount of the Credit Balance by the Remaining Debit Balance. Set the Remaining Debit Balance to zero. If the Remaining Debit Balance is zero or a nor-zero Credit Balance with a credit interest rate lower than the Current Debit Rate cannot be found

If the Remaining Debit Balance is not equal to the amount of the current Debit Balance

Set the amount of the current Debit Balance equal to the Remaining Debit Balance.

Until Remaining Debit Balance is zero or a non-zero Credit Balance with a credit interest rate lower than the Current Debit Rate cannot be found

Until there are no more DeM Balances from the Set of Debit Balances to offset

Step 3.b - Capitalising the balances based on Option B rules

If Total Credit Balances is less then or equal to Total Debit Balances, offset the Set of Credit Balances against the Set of Debit Balances in the following manner:

Create a Sef of Uncapitalised Credit Balances & make it identical to the Sef of Credit Balances

Taking each Credit Balance from the Set of Credit Balances in turn, starting with the lowest credit interest rate ... Repeat Set the Remaining Credit Balance figure equal to the amount of the current Credit Balance.

Set the Current Credit Rate figure equal to the credit interest rate of the current Credit Balance.

Repeat

If one was found

If the Remaining Credit Balance is greater than or equal to the amount of the Debit Balance

Add an entry to the Set of Capitalised Balances

Set the amount of the Capitalised Balance to be amount of the De6/f Balance Set the credit interest rate on the Capitalised Balance to be the debit interest rate on the Debit Balance

Set the debit interest rate of the Capitalised Balance to zero

Set the balance type of the Capitalised Balance to be Credit

Reduce the Remaining Credit Balance by the amount of the Debit Balance.

Set the amount of the Debit Balance to zero.

If the Remaining Credit Balance is less than the amount of the Debit Balance

Add an entry to the Set of Capitalised Balances

Set this amount of the Capitalised Balance to be amount of the Remaining Credit Balance

Set the credit interest rate on the Capitalised Balance to be the debit interest rate on the Debit Balance

Set the debit interest rate of the Capitalised Balance to zero

Set the balance type of the Capitalised Balance to be Credit

Reduce the amount of The Debit Balance by the amount of the Remaining Credit Balance Set the amount of the Remaining Credit Balance to zero

If the Remaining Credit Balance is zero or a non-zero Debit Balance with a debit interest rate greater than the Current Credit Rate cannot be found

Set the amount of the Uncapitalised Credit Balance corresponding to current Credit Balance equal to the Remaining Credit Balance.

Until Remaining Credit Balance is zero or a non-zero Debit Balance with a debit interest rate greater than the Current Credit Rate cannot be found Until there are no more Credit Balances from the Set of Credit Balances to offset

Create a Set of Uncapitalised Debit Balances & make it identical to the Sef of Debit Balances

Taking each Debit Balance from the Sef of Debit Balances in turn, starting with the highest debit Interest rate ...

Repeat

Set the Remaining Debit Balance Figure equal to the amount of the current Debit Balance.

Set the Current Debit Rate figure equal to the debit interest rate of the current DeM Balance.

Repeat

Locate the non-zero Credit Balance with the lowest credit interest, rate lower than the Current Debit Rate

If one was found

If the Remaining Debit Balance is greater than or equal to the amount of the Credit Balance

Add an entry to the Set of Capitalised Balances

Set the amount of the Capitalised Balance to the amount of the Credit Balance

Set the credit interest rate of the Capitalised Balance to zero

Set the debit interest rate on the Capitalised Balance to be the credit interest rate on the Credit Balance

Set the balance type of the Capitalised Balance to be Debit

Reduce the Remaining Debit Balance by the amount of the Credit Balance

Set the amount of the Credit Balance to zero. If the Remaining Debit Balance is less than the amount of the Credit Balance

Add an entry to the Set of Capitalised Balances

Set the amount of the Capitalised Balance to be the amount of the Remaining Debit Balance

Set the credit interest rate of the Capitalised Balance to zero

Set the debit interest rate on the Capitalised Balance to be the credit interest on the Credit Balance

Set the balance type of the Capitalised Balance to be Debit

Reduce the amount of the Credit Balance by the Remaining Debit Balance

Set the Remaining Debit Balance to zero.

If the Remaining Debit Balance is zero or a non-zero Credit Balance with a credit interest rate lower than the Current Debit Rate cannot be found be found

Set the amount of the Uncapitalised Debit Balance corresponding to current Debit Balance equal to the Remaining Debit Balance.

Until there are no more Debit Balances from the Set of Debit Balances to offset

Step 4. Calculate the amount of interest

If the balances were netted based on Option A rules

Determine the amount of interest on each non-zero credit balance by applying its credit interest rate. Sum these amounts to get the Total Credit Interest figure

Determine the amount of interest on each non-zero debit balance by applying its debit interest rate. Sum these amounts to get the Total Debit Interest figure

If the balances were netted based on Option B rules

If Total Credit Balances is less than or equal to Total Debit Balance

Determine the amount of interest on each non-zero Uncapitalised Credit Balance by applying the credit interest rate. Sum these amounts to get the Total Credit Interest figure

Determine the amount of interest on each non-zero Capitalised Credit Balance, by applying its credit interest rate. Add this amount to the Total Credit Interest figure

If Total Credit Balances is greater than Total Debit Balances

Determine the amount of interest on each non-zero Capitalised Debit Balance by applying its debit interest rate. Sum these amounts to get the Total Debit Interest figure

Determine the amount of Interest on each non-zero Capitalised Debit Balance by applying its debit interest rate. Add this amount to the Total Debit Interest figure

If Total Credit Interest > Total Debit Interest then the difference between the two figures represents the amount of interest earned.

If Total Credit Interest < Total Debit Interest then the difference between the two figures represents the amount of interest to be charged.

If Total Credit Interest => Total Debit Interest, there is no interest to be applied.

These methods for balance netting can be readily implemented by one skilled in the art. For example, a balance netting module 40 can be implemented as a data processing module having access to the transaction files 70 from which daily balances can be calculated. For balance offsetting, an offsetting module is provided which, in use, reads out and offsets the balances of jars with credit balances, in ascending order of interest rate, against balances of jars with debit balances in descending order of interest rate. For balance capitalising, a capitalising module is provided which, in use, reads out and capitalises the balances of jars with credit balances, in ascending order of interest rate, against balances of jars with debit balances in descending order of interest rate.

In each case, an interest calculation module can then calculate a single interest payment from the resulting offset or capitalised balances.

The invention allows provision of an integrated financial product comprising a plurality of jars with interest calculated using balance netting based on the balances of all the jars. Interest is then applied or deducted, as appropriate, from or to particular jars within the financial product. Most commonly, interest will be paid into or deducted from the current account.

The invention is of particular benefit when the financial product contains at least two credit jars having different interest rates or at least two debit jars having different interest rates, which could not previously be incorporated in a single product.

A major benefit of this system to the consumer is that, because interest in credit and debit jars are netted (by either offsetting or capitalisation) against each other on a daily basis they get the equivalent return which they would were their money moved daily between accounts to the most financially efficient distribution. Therefore, customers need pay less attention to the location of their money without losing out on interest.

This is shown particularly by considering the credit card product. A customer of a traditional bank might pay a high level of interest on a loan account or credit card debt whilst they have credit funds in a current account which exceed their debt. Even worse, they might miss a payment date on their credit card thereby incurring considerable interest payments which might otherwise have been free. Within the present invention, the credit card product can be configured so that assets are taken into account when considering whether a credit card debit balance has been paid off by the due date, thereby freeing a customer with sufficient credit assets from the risk of unwanted bills arising from missed payment dates. As the balance netting module 80 establishes balances from a historical transaction record 70, it can recalculate interest payments retrospectively which is important as whether or not interest is payable on a credit card typically depends on whether the balance is paid off in full some weeks after the credit card statement date. In the system disclosed herein an assumption can be made as to whether or not a customer will pay off their entire credit card debt on their balance netting day one month and, if they subsequently do not conform to this prediction, interest can be recalculated and backdated at the next balance netting day. A further benefit to consumers is that interest is optimised without all their funds simply being presented as being in one account. A common problem with known offsetting account is that mortgage customers will typically receive statements showing that their net assets are a large negative number. It is more pleasant and better for financial planning to retain separate jars including the whole range of financial products and so being able to show some credit balances despite having an overall debt to the financial service provider.

When Interest is calculated and applied

Interest on the integrated financial product is calculated on a daily basis. However, the actual calculation of daily basis interest takes place only on a monthly statement date (identical to the balance netting date) .

The balance on credit accounts may be pooled in order to determine which of a series of tiered interest rates should be applied to each account.

Interest may be a payment to the customer or to the financial institution. In calculating the interest payment, the amounts within each jar upon which interest is payable is taken into account. This is done overnight.

The interest on each jar within the integrated financial product will be added to or taken away from the financial product (as the case may be) once a month on the next interest date. There are two exceptions to this: Firstly, the interest paid by the consumer on any current account jar or savings jar will be added or taken away once a month on the interest date following the next interest date.

Secondly, the interest paid to the consumer on a savings jar on which the consumer has requested interest to be payable annually will be paid on each anniversary of the interest date following the opening of the jar.

In the case of a joint integrated financial product, when working out the interest paid or payable, account is not taken of which joint party owns which elements of the integrated financial product and whether they are in sole or joint names.

Example

For example, if a customer chooses the 1^st of each month as the Plan interest date, interest will be applied to all relevant jars on the 1^st of each month, and any scheduled payments for mortgages will also be collected on the 1^st of each month.

Interest will automatically adjust if back dated transactions are applied to any of the jars in the Plan. This enables credit cards to be implemented within the financial product as the interest rate applicable to a credit card depends on later events (such as whether payment is made in full before a certain date) . Credit card interest calculations assume that the credit card balance will be paid off by the statement/balance netting date. If this is not done, then interest is recalculated at the next statement/balance netting date.

All jars that are usually maintained with a credit balance will attract a different interest rate if the balance moves towards a debit balance.

For example, a current account jar may attract an interest rate of 3% when the jar has a credit balance, and an interest rate of 10% when the jar has a debit balance.

All jars that are usually maintained with a debit balance will attract a zero interest rate if the balance moves towards a credit balance.

The netting will be according to a set of rules that maximise the benefit for the customer.

The maximum number of people who can own a Plan, and therefore the jars, is restricted to two. The balance offsetting will occur irrespective of jar ownership.

If the rate on the debit balance is equal to or lower than the rate on the credit balances, then the balances/rates will not be offset for interest purposes.

Note: this may occur if fixed rate mortgages are offered where the mortgage rate charged during the fixed rate period is lower than the rate on savings or current account funds. See below for special arrangements on discount mortgages. Any balances remaining after this offsetting will be charged/applied at the appropriate interest rate.

Balance netting example 1

Balance Netting Rules & Regulations

A set of rules & regulations exist for Balance Netting that maximise the benefit for the customer. Rules that apply to both options A and B

1. If the debit balances - i.e. the sum of the balances - are higher than the credit balances, offset the credit balances using the debit balances. Start with the highest debit account interest rate first, then move onto the next highest debit account interest rate, and so on. 2. If there are a number of jars (or sub jars) within a plan that has the same interest rate, offset the balances against the first jar (or sub jar) at that rate in the order that those jars (or sub jars) have been created. 3. If the rate on the debit balance is equal to or lower than the rate on the credit balance, then the balances/rates will not be offset, i.e. balance netting will not take place. 4. Any balances remaining after this offsetting will be charged/applied at the appropriate interest rate. 5. If the purchases made using the credit card are repaid within the interest free period, the daily purchases balance will be excluded for balance netting purposes. Note: this may occur retrospectively and may result in interest adjustments on the other jars within the plan. Additional rules that apply to just option A 1. If the credit balances i.e. the sum of the balances - are higher than the debit balances, offset the debit balances using the credit balances. Start with the lowest credit account interest rate first, then move onto the next highest debit account interest rate, and so on. Additional rules that apply to just option B 1. The debit account interest rates are unaffected by Balance Netting and are charged out at their normal rate.

Calculated Example

Using Option A

Example ^'1 - borrowing more than saving

Step 1: Determine the actual balances and product interest rates.

Step 2: Sort the debit accounts in descending order of interest rate - in this example it is 23%, 12% and 8% - and sort the credit accounts in ascending order of interest rate - in this example it is 2%, 7% and 7.5%.

Step 3: Offset the account balances,

Aces = Accounts Credit card £1,080® ₂₃% Loan £6,000® 12% Mortgage £12,000 @ 8%

Current Account £l,200(f ISA £4,800 @ 7% Savings £3,000 @ 75% 2%

Now cancel out current Now cancel out the ISA Now cancel out the savings Leaving a 'netted account amount as follows amount as follows amount as follows off mortgage balance ofl0,080

£1,080 of the current account The £120 earned over from £1,080 of the savings amount is charged @ 8% is cancelled out by the Credit the first column plus the used to cancel out the £1,080 Card amount, leaving £120 £4,800 ISA amount is all debit amount carried over from savings cancelled out by the £6,000 the previous column The rest Loan Leaving £1,080 Loan of the savings (£1,920) is debit amount cancelled out by £1,920 of the £12,000 mortgage

Now we use the principle of cancelling out [Remember we have a borrowed amount of £1 ,080 (netting off) debit amounts with credit earned over] amounts In this example £1,080 of the current account will cancel out the credit Again cancel out (net off) debit amounts Here we have savings of £3,000 £1,080 of these card amount borrowed, leaving the with credit amounts We have £120 savings cancels out (nets off) the allowance earned customer with a credit amount of £120 still already earned over from the first over from the previous column, leaving £1,920 calculation Add that to the £4,800 ISA savings This £1 ,920 can cancel out £1 ,920 of the and we have a credit amount of £4,920 mortgage payment, leaving a debit amount of £10,080 £10,080 is left on the morgage which

This credit amount is cancelled out by the cannot be cancelled out with anything else £6,000 loan amount, now leaving the Therefore it Is this account that has interest posted customer with a debit amount of £1 ,080 against it, at it's normal debit rate of 8%

Step 4: Perform the interest calculation which, in this example is £10,080 @ 8% giving £806.40. The mortgage account is updated. [The other accounts remain the same.]

Example 2 - saving more than borrowing Step 1: Determine the actual balances

Step 2: Determine the interest rates. Once determined, list the debit accounts in descending order of interest rate - 23% and 8% - and list the credit accounts in ascending order of interest rate - 2%, 7% and 7.5%.

Step 3: Offset the account balances,

Credit Card £.3, 200 @ Mortgage £6,500 @ 8? 23%

Step 4: Perform the interest calculation, which in this example is £7,200 @ 7.5% = £540. The Premier Savings account is updated. The other accounts remain the same.

Using Option B

Example 1 - borrowing more than saving

Step 1: Step 1: Determine the actual balances and product interest rates.

Step 3: Offset the account balances

Step 4: Perform the interest calculations. Update all the accounts.

Example 2 - saving more than borrowing Step 1 : Determine the actual balances

Step 3: Offset the account balances.

Step 4: Perform the interest calculations. Update all the accounts.

Comparing Balance Netting Option A and Option B

Taking the examples given further, we can see that the result, for the customer, is exactly the same.

Illustration of Netting Rules - 2

Mr & Mrs Smith own an integrated financial product account with the following jars:-

Current Account 1 Mr & Mrs Smith £2,000 3% Current Account 2 Mr Smith £1,300 3% Current Account 3 Mrs Smith £200 0/D 9%

Savings Mrs Smith £5,000 5%

Loan Mr Smith £4,000 7%

Credit Card 1 Mr Smith £2,000 9%

Credit Card 2 Mrs Smith £1,500 9%

Mortgage Mr&Mrs Smith £50,000 fixed rate 4%

Mortgage Mr&Mrs Smith £20,000 Variable rate 6%

At a given point in time, the netting would occur under the two points as follows: Option A

Credit Balances totalling £8,300

Current Account 1 Mr & Mrs Smith £2,000 3%

Current Account 2 Mr Smith £1,300 3%

Savings Mrs Smith £5,000 5%

Debit Balances totalling £77,700

Current Account 3 Mrs Smith £200 9%

Loan Mr Smith £4,000 7%

Credit Card 1 Mr Smith £2,000 9%

Credit Card 2 Mrs Smith £1,500 9%

Mortgage Mr&Mrs Smith £50,000 fixed rate 4%

Mortgage Mr&Mrs Smith £20,000 variable rate 6%

Offset the credit balance of £8,300 against the debit balances with the highest interest rates .

...against...

Current Account 3 Mrs Smith £300 9%

Credit Card 1 Mr Smith £2,000 9%

Credit Card 2 Mrs Smith £1,500 9%

Loan Mr Smith £4,000 7%

Mortgage Mr & Mrs Smith £600 variable rate 6%

...resulting in interest charge being applied on....

Mortgage Mr & Mrs Smith £50, 000 fixed rate 4%

Mortgage Mr & Mrs Smith £19, 400 variable rate 6% Option B

Credit Balances totalling £8,300 Current Account 1 Mr & Mrs Smith £2,000 3% Current Account 2 Mr Smith £1,300 3% Savings Mrs Smith £5,000 5%

Debit Balances totalling £77,700 Current Account 3 Mrs Smith £200 9% Loan Mr Smith £4,000 7% Credit Card 1 Mr Smith £2,000 9% Credit Card 2 Mrs Smith £1,500 9% Mortgage Mr&Mrs Smith £50,000 fixed rate 4% Mortgage Mr&Mrs Smith £20,000 variable rate 6%

Capitalize the credit balance of £8,300 against the debit balances with the highest interest rates to determine the interest rates that the credit balances will attract.

Debit Balances Credit balances will therefore attract £3,700 total at 9% £3,700 at 9% £4,000 total at 7% £4,000 at 7% £20,000 total at 6% £600 at 6% £50, 000 total at 4%

...resulting in interest being applied on ....

Current Account 1 Mr & Mrs Smith £2,000 9% Current Account 2 Mr Smith £1,300 9% Savings Mrs Smith { £400 9% { £4,000 7% { £600 6% ...and interest being charged on...

Current Account 3 Mrs Smith £200 9% Loan Mr Smith £4,000 7% Credit Card 1 Mr Smith £2,000 9% Credit Card 2 Mrs Smith £1,500 9% Mortgage Mr&Mrs Smith £50,000 fixed rate 4% Mortgage Mr&Mrs Smith £20,000 variable rate 6%

Interest Application

Any interest which is due to be applied/charged after the offsetting has occurred will be posted to alter the balance of the relevant jar.

Any interest applied to a credit balance will be subject to income tax.

Other Example Product Features

Income Streams

Any interest applied to a savings account may be withdrawn by the customer automatically as a regular income stream after deduction of tax.

Any overpayments made in reduction of a secured mortgage, whether ad hoc or regular, will be available to be withdrawn by the customer on request.

The customer may withdraw funds on request from a mortgage up to the limits as agreed by the bank. Product Types within Jars

Certain jar types have specific rules regarding interest calculation.

Current Account

The current account will operate with one rate for credit balances and a different rate for debit balances (overdraft) . Separate rates may be provided for authorised and unauthorised overdrafts.

If a customer has a current account jar (credit balance) as well as a savings account, the current account balance may be pooled with the Direct Access Savings balances to determine the interest rate to be given on the current account.

Savings

The Direct Access savings accounts and any Current Accounts will typically be pooled for interest rate purposes.

For example, assume that a Direct Access product existed with the following tier structure:

£0 to £5,000 3% £5,001 to £25,000 4% £25,001 to £100,000 4.5% £100,001 + 5%

Assume that a Notice product existed at a rate of 5.25% Assume that the current account rate was also 3%

If a customer has the following jar accounts:

Current Account £2,000 Direct Access Savings £10,000 Notice Account £25,000

....they would attract the following rates: Current Account + Direct Access Savings = £12,000, therefore the rate on both = 4% Notice Account = 5.25%

If a customer had the following jars: Current Account £1,500 Direct Access Savings £3,000

...both of these would attract an interest rate of 3%

Discount Period of a Mortgage

Discount rate mortgages may be offered, e.g., if the variable mortgage rate is 6%, a discount rate of 4% may apply for a period of 6 months.

During the period of discount, the discounted mortgage rate may be lower than the savings interest rate. If this occurs, the customer will be paid interest on the savings at the variable mortgage rate for the period of the discount.

Eg, if the savings rate is 5%, using the above mortgage rate, the customer would be paid 6% on the savings balance for 6 months, and would be charged interest on the mortgage at 4% for 6 months. After the 6 month discount period ends, the Savings would attract an interest rate of 5% and the mortgage would be charged at 6%, although further benefit is likely to accrue for the customer as the balance offsetting rules described above will start to apply.

During any other periods, if the mortgage rate is lower than the savings interest rate, the netting rules will simply cease to apply. Fixed rate, fixed term and notice products can be readily provided.

Typical components of the financial product might be a Current Account, Direct Access Savings, Long Terms Savings, a Mortgage, a Personal Loan and a Revolving Credit facility with a credit card.

An individual financial product may have more than one owner, allowing joint ownership. Different jars within a single financial product may be owned singly or jointly. Individuals may have more than one plan.

In order to obtain the maximum benefit from the balance offsetting interest calculation, it will be in the customer's interest to take at least one credit product and one debit product within the plan. However, a customer may choose which elements of the plan, he/she wishes to take out. The only restriction which will be imposed is that a customer will not be allowed to take out a current account alone. Where there are 2 plan holders within a plan, the individual jars may be held in joint or single names. Any individual plan holder may view all accounts within a joint plan but may not transact on accounts which he is not an owner of.

It will be possible to link and service the elements of the financial product through an external bank account. There will be no restrictions on the number of external bank accounts which may be held against the plan. There will only be 1 direct debit instruction for each external bank account attached to the plan irrespective of how many internal accounts or the type of jar which the external bank account is to service.

Any jar which is linked to an external bank account will transact directly with the external bank account i.e. it will not be necessary for all transactions with an external account to be fed through the current account.

Credit Card Product

Can be variable or fixed rate. No interest charge on card purchases if balances are cleared monthly. Interest is charged on cash advances, or transfers to the current account with immediate effect The interest rate for cash advances will typically be higher than the standard interest rate.

It will be clear to one skilled in the art that the product described herein can be readily varied and adapted to take account of variation in terms and conditions. Furthermore, although the present example relates to a consumer product, it could be readily adapted for business or merchant banking. It would be possible to calculate interest by option 1 and option 2 and apply whichever calculation gave best value to the customer taking into account tax regulations.

The invention extends to computer programs in the form of source code, object code, code intermediate sources and object code (such as in a partially compiled form) , or in any other form suitable for use in the implementation of the invention. In particular the invention extends to computer programs for implementing the means for interest calculation by balance netting.

Computer programs may be standalone applications, software components or plug-ins to other applications. Computer programs may be web pages. Computer programs may be embodied on a carrier, being any entity or device capable of carrying the computer program: for example, a storage medium such as ROM or RAM, optical recording media such as CD-ROM or magnetic recording media such as floppy discs. The carrier may be a transmissible carrier such as an electrical or optical signal conveyed by electrical or optical cable, or by radio or other means. Computer programs may be provided for download across the internet from a server. Computer programs may also be embedded in an integrated circuit.

Further modifications and alterations may be made by one skilled in the art within the scope of the invention herein disclosed.

Claims

1. A computer system for administering a financial product, the financial product comprising at least one credit jar upon which interest is paid to a customer at an interest rate and at least one debit jar upon which interest is payable by the customer at an interest rate, the system comprising:

a plurality of core systems for administering and processing transactions relating to particular jars/

2. The computer system of Claim 1 wherein the interest calculation means calculates a single interest charge or payment pertaining to the whole financial product.

3. The computer system of Claim 1 wherein a single transaction file comprises information about each jar.

4. The computer system of any preceding Claim further comprising translation means for converting transaction information from different core systems into a single transaction file format.

5. The computer system of any preceding Claim further comprising a core system instruction means adapted to send instructions relating to transactions to one or more core systems.

6. The computer system of Claim 4 wherein the core system instruction means stores balance information relating to jars administered by more than one core system.

7. The computer system of Claim 6 wherein the core system instruction means communicates with a printing means for printing a statement.

8. The computer system of any of Claims 5 to 7 wherein the core system instruction means can action money transfers between jars same day and is adapted to display or print statements taking into account said money transfers the same day as the transfer has taken place.

9. The computer system of any preceding Claim wherein the interest calculation means takes into account the balance of a plurality of jars when calculating interest.

10. The computer system of any preceding Claim wherein the interest calculation means allows a choice of different method of calculating interest taking into account the balance of a plurality of jars.

11. The computer system of any preceding Claim wherein the interest calculation means calculates interest by: (a) offsetting the credit balance of the credit jar or jars against the debit balance of the debit jar or jars in a calculated order; (b) calculating the interest due on the balances of the debit jars after offsetting at the particular interest rate of the particular debit jars and calculating the interest payable on the balances of the credit jars after offsetting at the particular interest rate of the particular credit jars; and (c) outputting or applying to a jar the calculated interest due and the calculate interest payable.

12. The computer system of Claim 11 wherein the balance of the credit jar on which the financial service provider pays the lowest interest rate is offset first against the balance of the debit jar on which the financial service provider charges the highest interest rate and then against the balance of other debit jars in descending order of interest rate.

13. The computer system of Claim 12 wherein the balance of any further credit jars in order of increasing interest rate is then offset against debit jar balances in the same way, in ascending order of interest rate paid by the financial service provider.

14. The computer system of any of Claims 12 to 13 wherein, if two or more credit or debit jars have the same interest rate, their balances are used for offsetting in the order in which they were opened by the customer.

15. The computer system of any of Claims 12 to 13 wherein credit and debit jars of equal notice period are offset against each other.

16. The computer system of any of Claims 12 to 15 wherein the offsetting process stops when the next credit balance in order has a higher interest rate than that paid on the next debit balance in order.

17. The computer system of any of Claims 12 to 16 wherein the offsetting process stops when the next debit balance reached has the same or lower interest rate than the next credit balance.

18. The computer system of any of Claims 1 to 10 wherein the interest calculation means calculates interest by (a) capitalising the debit balances of the debit jar or jars against the credit balances of the credit jar or jars in a calculated order so as to calculate an amount of the credit balance which to be paid interest at the debit interest rate; (b) calculating the interest payable to the customer on the capitalised balances of the credit jars at the particular interest rate of the particular capitalised debit jars; (c) calculating the interest payable by the customer on the debit balances of the debit jars at the particular interest rates of the particular debit jars and; . (d) outputting or applying to a jar the interest due to the customer and outputting or applying to a jar the interest payable by the customer.

19. The computer system of Claim 18 wherein the balance of the credit jar on which the financial service provider charges the lowest interest rate is capitalised first against the balance of the debit jar on which the financial service provider charges the highest interest rate and then against the balance of other debit jars in descending order of interest rate.

20. The computer system of Claim 19 wherein the financial product comprises at least three jars.

21. The computer system of Claim 19 or Claim 20 wherein the balance of any further credit jars is then capitalised against debit jar balances in the same way, in ascending order of interest rate paid by the financial service provider.

22. The computer system of any of Claims 19 to 21 wherein, if two or more credit or debit jars have the same interest rate, their balances may be used for capitalising in the order in which they were opened by the customer.

23. The computer system of any of Claims 21 to 22 wherein credit and debit jars of equal notice period will be capitalised against each other.

24. The computer system of any of Claims 21 to 23 wherein the capitalising process stops when the next credit balance in order has a higher interest rate than that paid on the next debit balance in order.

25. The computer system of any of Claims 21 to 24 wherein the capitalising process stops when the next debit balance reached has the same or lower interest rate than the next credit balance.

26. The computer system of any of Claims 21 to 25 wherein the capitalising process stops when all the credit balances have been capitalised against debit balances.

27. A method of calculating the interest to be paid on a financial services product comprising at least three jars selected from at least one credit jar upon which interest is paid to a customer and at least one debit jar upon which interest is payable by the customer, the method comprising the steps of: (a) offsetting the credit balance of the credit jar or jars against the debit balance of the debit jar or jars in a calculated order; (b) calculating the interest due on the balances of the debit jars after offsetting at the particular interest rate of the particular debit jars and calculating the interest payable on the balances of the credit jars after offsetting at the particular interest rate of the particular credit jars; and (c) outputting or applying to a jar the calculated interest due and the calculate interest payable.

28. The method of Claim 27 wherein the balance of the credit jar on which the financial service provider pays the lowest interest rate is offset first against the balance of the debit jar on which the financial service provider charges the highest interest rate and then against the balance of other debit jars in descending order of interest rate.

29. The method of Claim 28 wherein the balance of any further credit jars in order of increasing interest rate is then offset against debit jar balances in the same way, in ascending order of interest rate paid by the financial service provider.

30. The method of any of Claims 27 to 29 wherein, if two or more credit or debit jars have the same interest rate, their balances are used for offsetting in the order in which they were opened by the customer.

31. The method of any of Claims 27 to 30 wherein credit and debit jars of equal notice period will be offset against each other.

32. The method of any of Claims 27 to 31 wherein the offsetting process stops when the next credit balance in order has a higher interest rate than that paid on the next debit balance in order.

33. The method of any of Claims 27 to 32 wherein the offsetting process stops when the next debit balance reaches has the same or lower interest rate than the next credit balance.

34. The method of any of Claims 27 to 33 wherein the offsetting process stops when all the credit balances have been offset against debit balances.

35. A method of calculating the interest to be paid on a financial services product comprising at least three jars selected from at least one credit jar upon which interest is paid to a customer and at least one debit jar upon which interest is payable by the customer, the method comprising the steps of: (a) capitalising the debit balances of the debit jar or jars against the credit balances of the credit jar or jars in a calculated order so as to calculate an amount of the credit balance which to be paid interest at the debit interest rate; (b) calculating the interest payable to the customer on the capitalised balances of the credit jars at the particular interest rate of the particular capitalised debit jars; (c) calculating the interest payable by the customer on the debit balances of the debit jars at the particular interest rates of the particular debit jars; and (d) outputting or applying to a jar the interest due to the customer and outputting or applying to a jar the interest payable by the customer.

36. The method of Claims 35 wherein the balance of the credit jar on which the financial service provider charges the lowest interest rate is capitalised first against the balance of the debit jar on which the financial service provider charges the highest interest rate and then against the balance of other debit jars in descending order of interest rate.

37. The method of Claims 35 or Claim 36 wherein the balance of any further credit jars is then capitalised against debit jar balances in the same way, in ascending order of interest rate paid by the financial service provider.

38. The method of any of Claims 35 to 37 wherein if two or more credit or debit jars have the same interest rate, their balances are used for capitalising in the order in which they were opened by the customer.

39. The method of any of Claims 35 to 38 wherein credit and debit jars of equal notice period are capitalised against each other.

40. The method of any of Claims 35 to 39 wherein the capitalising process stops when the next credit balance in order has a higher interest rate than that paid on the next debit balance in order.

41. The method of any of Claims 35 to 40 wherein the capitalising process stops when the next debit balance reaches has the same or lower interest rate than the next credit balance.

42. The method of any of Claims 35 to 41 wherein the capitalising process stops when all the credit balances have been capitalised against debit balances.

43. Computer software comprising program code means which, when loaded into a computer, cause it to perform as the interest calculation means of any of Claims 1 to 26.

44. Computer software comprising program code means which, when loaded into a computer, cause it to perform the method of any of Claims 27 to 42.

45. A data handling system suitable for establishing interest to be paid or payable on a financial product, the financial product having at least three jars, each jar having a balance and an interest rate associated therewith, the data handling system comprising:

offsetting means which, in use, read out and offset the balances of jars with credit balances, in ascending order of interest rate, against balances of jars with debit balances in descending order of interest rate; and

interest calculation means which calculate a sum of interest to be paid or payable by summing the interest to be paid or payable on the offset balances of individual jars at the interest rate of each said jar.

46. The data handling system of Claim 45 wherein, if two or more credit or debit jars have the same interest rate, their balances are used for offsetting in the order in which they were opened by the customer.

47. A data handling system suitable for establishing interest to be paid or payable on a financial product, the financial product having at least three ja^s, each jar having a balance and an interest rate associated therewith, the data handling system comprising:

interest calculation means which calculate a sum of interest to be paid or payable by summing the interest to be paid or payable on the capitalised balances of individual jars at the interest rate of each said jar.

47. The data handling system of Claim 45 wherein, if two or more credit or debit jars have the same interest rate, their balances are used for capitalising in the order in which they were opened by the customer.

48. An integrated financial product comprising a plurality of jars, at least one jar being a credit jar upon which interest is to be paid to the financial product owner and at least one jar being a debit jar upon which interest is to be paid by the financial product owner, a single interest payment to or from the financial product owner being calculated on the balances of each credit and debit jar, characterized in that:

49. The integrated financial product of Claim 48 wherein a customer has a choice of interest calculation method.

50. The integrated financial product of Claim 48 or Claim 59 wherein interest is calculated by:

51. The integrated financial product of Claim 50 wherein the balance of the credit jar on which the financial service provider pays the lowest interest rate is offset first against the balance of the debit jar on which the financial service provider charges the highest interest rate and then against the balance of other debit jars in descending order of interest rate.

52. The integrated financial product of Claim 51 wherein the balance of any further credit jars in order of increasing interest rate is then offset against debit jar balances in the same way, in ascending order of interest rate paid by the financial service provider.

53. The integrated financial product of any of Claims 50 to 52 wherein, if two or more credit or debit jars have the same interest rate, their balances are used for offsetting in the order in which they were opened by the customer.

54. The integrated financial product of any of Claims 50 to 53 wherein credit and debit jars of equal notice period will be offset against each other.

55. The integrated financial product of any of Claims 50 to 54 wherein the offsetting process stops when the next credit balance in order has a higher interest rate than that paid on the next debit balance in order.

56. The integrated financial product of any of Claims 50 to 55 wherein the offsetting process stops when the next debit balance reaches has the same or lower interest rate than the next credit balance.

57. The integrated financial product of any of Claims 50 to 56 wherein the offsetting process stops when all the credit balances have been offset against debit balances.

58. The integrated financial product of Claim 48 or Claims 49 wherein interest is calculated by:

59. The integrated financial product of Claim 58 wherein the balance of the credit jar on which the financial service provider charges the lowest interest rate is capitalised first against the balance of the debit jar on which the financial service provider charges the highest interest rate and then against the balance of other debit jars in descending order of interest rate.

60. The integrated financial product of Claim 58 or Claim 59 wherein the balance of any further credit jars is then capitalised against debit jar balances in the same way, in ascending order of interest rate paid by the financial service provider.

61. The integrated financial product of any of Claims 58 to 60 wherein if two or more credit or debit jars have the same interest rate, their balances are used for capitalising in the order in which they were opened by the customer.

62. The integrated financial product of any of Claims 58 to 61 wherein credit and debit jars of equal notice period are capitalised against each other.

63. The integrated financial product of any of Claims 58 to 62 wherein the capitalising process stops when the next credit balance in order has a higher interest rate than that paid on the next debit balance in order.

64. The integrated financial product of any of Claims 58 to 63 wherein the capitalising process stops when the next debit balance reaches has the same or lower interest rate than the next credit balance.

65. The integrated financial product of any of Claims 58 to 64 wherein the capitalising process stops when all the credit balances have been capitalised against debit balances.