Term Deposits

JoyaJoya Member Posts: 13

Hi there, where can I find information about term deposits accounting?
Do I need to create a new account in Charts of Accounts?
Will I need to do a journal entry for the interest?
How will I need to categorise it once the expense is imported from my current bank account transactions?

Thank you

Comments

  • JamieDJamieD Administrator Posts: 1,122 admin

    Hey @Joya. I just want to get a stronger sense of what you're exactly referring to here and please correct me if I'm wrong -- are you looking at adding deposits for payments on bills that you have outstanding in Wave? To be honest, term deposits isn't a term I'm super familiar, but I do want to tag our resident @Mikeg to see if he has any insight on how to accomplish this in Wave.

  • MikegMikeg Member Posts: 430 ✭✭✭

    @Joya ,
    If I am interpreting your question correctly. You depositing cash into a term account. They will pay you interest while holding your cash. At the end they will return your cash and interest. Is that correct? If so, you will need to make journal entries. The following would be the typical scenario.
    Create term deposit in accounts
    (created account) Debit - Term Deposit - XXX
    (transferred) Credit - Cash XXX
    Description To record Term deposit
    To record income
    Debit - Term deposit X.XX
    Credit - Interest Income X.XX
    Description To record accrued interest income on term deposit
    When Term Ends
    Debit - Cash XXXX
    Credit - Term Deposit XXXX
    To record transfer of Term deposit

  • JoyaJoya Member Posts: 13

    Thanks @JamieD

    Hi @Mikeg , yes, that's it, although I didn't deposit cash but I transferred from my bank account to the term deposit account.

    I'm trying to create the account in Charts of Accounts although I don't know which one to choose:

    Everything then will be imported in transactions from my bank account and I will need just to categorise them in Interest and Term deposit (once created), right?

    Thank you

  • MikegMikeg Member Posts: 430 ✭✭✭

    @Joya
    You would create the term deposit account under assets/cash and bank. I don't think the import feature would work with other asset account types. Once established and connected to your bank you can categorize the withdrawal from you regular account to the term account as a transfer. Account for the interest payments in the Term Deposit account as interest income.

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