tag:infinitekind.tenderapp.com,2009-01-14:/discussions/general-questions/158-using-overdraft-cash-advance-with-a-checking-accountInfinite Kind: Discussion 2018-10-18T13:53:46Ztag:infinitekind.tenderapp.com,2009-01-14:Comment/1544522009-05-06T03:08:28Z2009-05-06T03:08:32ZUsing overdraft / cash advance with a checking account<div><p>I have an overdraft protection account (ODP) that is tied my
checking account. I have a set amount available for overdraft
protection limit that increases and decreases when payments are
made to the ODP or when withdrawals are made to the ODP.. How do I
account for this bookkeeping-wise?</p>
<p>Do I keep 2 accounts, one for checking and one for overdraft? OR
credit overdraft funds to my checking account when ODP is utilized
and then debit funds from ODP when a payment is made on the ODP? OR
is there a better solution. I'd like a detailed explanation,
assuming a Moneydance for Dummies perspective. - Thanks!</p></div>Paul Silvermantag:infinitekind.tenderapp.com,2009-01-14:Comment/1544522009-05-07T16:55:36Z2009-05-07T16:55:36ZUsing overdraft / cash advance with a checking account<div><p>Where do your overdraft funds reside when they are not in use?
Is it in a savings account, or is it just a special part of the
checking account that is not ordinarily usable like the other
funds? Your idea of having a separate overdraft fund sounds like
the best bet. Just record a transfer of funds back and forth as
needed to reflect use of the overdraft.</p></div>John Seldentag:infinitekind.tenderapp.com,2009-01-14:Comment/1544522009-05-07T17:50:20Z2009-05-07T17:50:22ZUsing overdraft / cash advance with a checking account<div><p>The funds are not ordinarily usable like other funds. The
overdraft is a line of credit accessible only by my checking
account. It is, I believe, a separate account. I can view it
separately online so I make this assumption. Generally the checking
account is funded in increments of $100. I am billed by monthly by
the bank for interest payments.</p></div>Paul Silvermantag:infinitekind.tenderapp.com,2009-01-14:Comment/1544522009-05-07T18:05:46Z2009-05-07T18:05:46ZUsing overdraft / cash advance with a checking account<div><p>Isn't that sort of thing essentially a loan account? Maybe
setting it up as a loan is what you need.</p>
<p>Mine works differently and takes an overdraft from my savings
account with a small fee - no interest charges for mine.</p></div>Marytag:infinitekind.tenderapp.com,2009-01-14:Comment/1544522009-05-07T20:07:55Z2009-05-07T20:07:56ZUsing overdraft / cash advance with a checking account<div><p>I suppose it is a loan account as there is principal to be
repaid and interest charged, though the loan is for an unspecified
amount of time. Will someone provide good instructions on how to do
this in Moneydance. Thank you.</p></div>Paul Silvermantag:infinitekind.tenderapp.com,2009-01-14:Comment/1544522009-05-08T03:00:23Z2009-05-08T03:03:03ZUsing overdraft / cash advance with a checking account<div><p>I suggest using a simple Liability account, versus a Loan
Account. Loan Account looks geared towards a mortgage or other
similarly structured loan.</p>
<p>With the Liability account, you can enter transactions against
the Liability account from your checking account when overdraft is
used and later paid back. Interest can be booked against your
specified Expense Account. This way you can track what you owe in
overdraft funds by looking at the Liability Account and it
correctly reduces your net worth as a debt to your bank, while the
interest paid is tracked as just another expense.</p></div>Hans N.tag:infinitekind.tenderapp.com,2009-01-14:Comment/1544522009-05-21T23:36:56Z2009-05-21T23:36:56ZUsing overdraft / cash advance with a checking account<div><p>Hi Paul</p>
<p>I am sorry I did not respond to this discussion my self in a
timely manor. Are you sufficiently satisfied with the information
provided in this discussion such that I can mark the issue as
resolved? Or do you require further assistance?</p>
<p>Sincerely</p>
<p>Ben Spencer</p></div>Ben Spencertag:infinitekind.tenderapp.com,2009-01-14:Comment/1544522009-08-18T03:48:46Z2009-08-18T03:48:49ZUsing overdraft / cash advance with a checking account<div><p>I have a similar situation with a home equity loan that is tied
in with my overdraft. It looks like a regular "checking account"
would work, however it would need interest fields I guess. I have
little experience, but I will test several methods to see what
works. The liability account is a quick fix imo, but it should work
and all you need to do is add the interest as an expense every
month.</p></div>Thomas