CD - Asset or Investment?

Jeff B's Avatar

Jeff B

23 Jan, 2020 11:16 PM

Reading the discussions, there seems to be varied opinions on the best way to set up a CD. I'm new to MD and have a CD to enter.

I think it would be helpful to me and I'm sure other new users if there was a list of the pro's & con's to setting up a CD as an asset versus an investment.

Thanks!

  1. 1 Posted by -Kevin N. on 24 Jan, 2020 12:30 AM

    -Kevin N.'s Avatar

    Hi Jeff,

    I suppose if you intend to hold the CD to maturity and don't care about daily price fluctuations, the easiest route would be to hold the CD in an Asset account. Easy = a pro.

    I don't really see a con in the Asset account method (if held to maturity) other than the CD would be held in a different Moneydance account than the one that you purchased it through. e.g. a Bank or Brokerage.

    I bought several short-term CDs (1 year ~ 18 months) through Fidelity. Hence, I created a security for each one in my investment account. I somewhat regret that move as it cluttered my list of investments and they can't really be deleted after maturity without a kludge. I would put short term CD's as securities in the con column.

    -Kevin N. (not a member of MD support)

  2. 2 Posted by dwg on 24 Jan, 2020 01:10 AM

    dwg's Avatar

    In some parts of the world CDs can be called Term Deposits as well as some other names.

    My bank structures them just like ordinary interest earning bank accounts, they have an account number etc, although without the ability to withdraw or deposit money into them, so in my case I have just set them up as a bank account, interest gets recorded as I would in any normal bank account like a savings account. So how your institution structures them can also be a pointer to how to set them up in Moneydance.

  3. 3 Posted by Jeff on 24 Jan, 2020 12:39 PM

    Jeff's Avatar

    Thanks, for comments. So, there are 3 options, Asset, Bank & Investment account. I hold CD's to maturity.

    Without have to create dummy accounts for each of the 3 options for tesing, do you know if there is any difference in the way the Asset, Bank & Investment accounts show up in reports & graphs?

  4. 4 Posted by -Kevin N. on 24 Jan, 2020 01:23 PM

    -Kevin N.'s Avatar

    Hi Jeff,

    An addendum to the 'Bank' account option could be to create a 'Child' account of the 'Parent' Bank account to hold the CD(s).

    With regards to reporting, I think that the only difference would be that the two Investment reports (Investment Performance & Investment Transactions) could not report on Asset or Bank account holdings.

    -Kevin N. (not a member of MD support)

  5. 5 Posted by dwg on 24 Jan, 2020 08:37 PM

    dwg's Avatar

    I'm a fellow user.

    As Kevin has said, set them up as an Investment or Asset and they do not show in the Investment reports.

    I do not find that significant because the capital value of such assets do not change and the investment return is fixed.

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