Creating a CD account

[dpetherbridge]

We have money in a restricted account 01-3224-108 and want to move a portion to a Certificate of Deposit. Do we simply create an investment account say 01-1375 for the CD then take the money from the expense account 01-7224-108, and corresponding release? How do we account for interest on the CD? I feel it is a bit more complicated than this.

We are also moving a chunk of money from our checking account to a money market account to get better interest. What would be the transaction to do this. Create an account, say 01-1230, and debit that and credit the 01-1110?

thanks,
Dan

[NeilZ]

We have money in a restricted account 01-3224-108 and want to move a portion to a Certificate of Deposit. Do we simply create an investment account say 01-1375 for the CD then take the money from the expense account 01-7224-108, and corresponding release? How do we account for interest on the CD? I feel it is a bit more complicated than this.

Its a bit more complicated. I'm assuming that you're moving the funds within your bank. First off, this is NOT an expense. You're not spending any funds, you're just moving them around in the system. I'm going to assume that the restricted funds were setup under the Maintain List of Donor Restrictions, I'm also assuming that the funds are kept in the same checking account as all the other funds under Fund 01.

You would then create the following transaction:

DB 01-1310-000 Certificate of Deposit $1000
CR 01-1110-000 Checking Account $1000

You'd then click on the button to Release Restricted Funds which would then add the following lines to the transaction:

DB 01-4810-000 Restricted Fund Release Account $1000 (again you should have had this setup when using the Maintain Donor Restriction)
CR 01-4999-000 Released from restrictions account $1000

What the last part did was release the funds from the restricted account to the UNRESTRICTED NET ASSETS account which will be the one that the asset closes to.

We are also moving a chunk of money from our checking account to a money market account to get better interest. What would be the transaction to do this. Create an account, say 01-1230, and debit that and credit the 01-1110?

thanks,
Dan

Again since I'm assuming that you're moving within the bank, then it would look much like the one for the CD but without releasing restricted funds:

DB 01-1230-000 Money Market Checking $1000
CR 01-1110-000 Checking Account $1000

Does this help?

Again, I always advise that you do a Powerchurch BACKUP of ACCOUNTING ONLY using the built-in backup so you can revert back if it doesn't look right.

UPDATE: I forgot the part about accounting for the increase in the CD at the end of the period. Here's a thread that should assist you with that:

https://www.powerchurch.com/forum/viewt ... 07&p=42776

[dpetherbridge]

Thanks Neil,

The VD and money market are different banks than we have our checking account - including restricted funds. So for the check to the other bank wouldn't be a credit to checking and debit to the new account?

Thanks again,
Dan
and

We have money in a restricted account 01-3224-108 and want to move a portion to a Certificate of Deposit. Do we simply create an investment account say 01-1375 for the CD then take the money from the expense account 01-7224-108, and corresponding release? How do we account for interest on the CD? I feel it is a bit more complicated than this.

Its a bit more complicated. I'm assuming that you're moving the funds within your bank. First off, this is NOT an expense. You're not spending any funds, you're just moving them around in the system. I'm going to assume that the restricted funds were setup under the Maintain List of Donor Restrictions, I'm also assuming that the funds are kept in the same checking account as all the other funds under Fund 01.

You would then create the following transaction:

DB 01-1310-000 Certificate of Deposit $1000
CR 01-1110-000 Checking Account $1000

You'd then click on the button to Release Restricted Funds which would then add the following lines to the transaction:

DB 01-4810-000 Restricted Fund Release Account $1000 (again you should have had this setup when using the Maintain Donor Restriction)
CR 01-4999-000 Released from restrictions account $1000

What the last part did was release the funds from the restricted account to the UNRESTRICTED NET ASSETS account which will be the one that the asset closes to.

We are also moving a chunk of money from our checking account to a money market account to get better interest. What would be the transaction to do this. Create an account, say 01-1230, and debit that and credit the 01-1110?

thanks,
Dan

Again since I'm assuming that you're moving within the bank, then it would look much like the one for the CD but without releasing restricted funds:

DB 01-1230-000 Money Market Checking $1000
CR 01-1110-000 Checking Account $1000

Does this help?

Again, I always advise that you do a Powerchurch BACKUP of ACCOUNTING ONLY using the built-in backup so you can revert back if it doesn't look right.

UPDATE: I forgot the part about accounting for the increase in the CD at the end of the period. Here's a thread that should assist you with that:

https://www.powerchurch.com/forum/viewt ... 07&p=42776

[dpetherbridge]

Thanks Neil,

The CD and money market are different banks than we have our checking account - including restricted funds. So for the check to the other bank wouldn't be a credit to checking and debit to the new account? How does the restricted account 01-3224-108 get reduced?
DB 01-4810-000 Restricted Fund Release Account $1000 (again you should have had this setup when using the Maintain Donor Restriction)
CR 01-4999-000 Released from restrictions account $1000
Thanks again,

OK ... again, I'm going to assume that the current restricted funds are in the current checking account. I'm also going to assume that they were setup using the Maintain List of Donor Restricted Funds.

1. Create a vendor but do NOT enter any accounts on the vendor record
2. Write the check using the same entries as you would if it were in the same bank

DB 01-1310-000 Certificate of Deposit $1000
CR 01-1110-000 Checking Account $1000

3. Then click on the Release Restricted Funds button.

DB 01-4810-000 Restricted Fund Release Account $1000
CR 01-4999-000 Released from restrictions account $1000

This moves the funds from the restricted account

4. Print the check and take it to the other bank.

However if this is a large amount of funds, you may want to go to the bank and have a cashier's check cut. In which case you would enter a MANUAL CHECK for the transfer, then add one for any fees to have the check cut, and use the expense account you have (or create) for bank fees.

Do the same for the money you're moving to the Money Market, but since they're unrestricted, there's no need to do any restricted funds release (Step 3 above)