There are some special considerations when entering interest received on a Fixed Interest or Term Deposit Rollover.
You will first process a receipt of interest income in the usual manner, adding either to a selected bank account (if only the principal is to be rolled over), or to your main bank account (if both principal and interest are to be rolled over).
You will then process a disposal of the original Term Deposit and a reinvestment of the desired amount.
STEP 1: Process the receipt of interest income.
Click the INCOME tab to display the Add New Income screen.
Select the Account – either Fund or a specific member account if the Term Deposit is a segregated Asset. (This should be the same account that owns the Term Deposit.)
The Asset Selection field displays. Select the Asset (the Bond or Term Deposit you are rolling over).
The Income Type can only be Interest. You cannot select to reinvest. Therefore, you must credit the interest to a selected bank account. If you are rolling over both principal and interest, you will later re-allocate this interest to the reinvested Fixed Deposit.
Select a bank account to which to credit the interest.
- If you are reinvesting principal and interest, credit interest to a primary bank account. It will later be debited to the same bank account to complete the rollover.
- If you are reinvesting principal only, or not reinvesting at all, credit the interest to the account you have selected to hold these funds.
Enter the interest amount and the date of receipt.
STEP 2: Process Disposal of the Term Deposit or Bond
You should now enter disposal of the Bond or Term Deposit. You should do this even if you are reinvesting/rolling over and regardless of whether or not you intend to reinvest the interest received.
Select the ASSETS tab. Click the ASSET DISPOSALS button.
Ensure that the Account selected is the account that owned the asset to be rolled over.
Select the Asset: the Term Deposit or Bond to be rolled over.
The purchase date, maturity date and balance will be displayed in the lower panel.
Enter the disposal date.
Select the bank account to which the proceeds are to be deposited. (If you are rolling over both principal and interest, be sure to select the same bank account you selected to credit the interest income.)
Click DISPOSE OF ASSET.
Your bank account should now display two credit entries – one for the interest received and one for the bond or term deposit purchase price/disposal proceeds.
STEP 3: Process Reinvestment (if rolling over)
Proceed with this step only if reinvesting/rolling over the fixed deposit or bond.
Click the ASSET tab.
Click ADD NEW ASSET.
Select the Account to own the rolled-over asset (Fund, or a member account if this is a segregated asset)
Select the Asset Class and Category. (If rolling over, these will be identical to the Class and Category of the disposed asset.)
Name the asset. To easily identify it as a rolled over Bond or Term Deposit, it may be wise to retain the original name but add ”Rolled” or ”Rolled<date>”.
Enter the Purchase/Rollover date and the new interest rate.
Enter the Balance to be invested.
- If reinvesting principal only, this will be the amount originally invested – i.e. the amount you entered as the disposal proceeds.
- If reinvesting both principal and interest, this will be the total of the original bond/term deposit (the disposal proceeds) PLUS the interest received.
Select the Bank Account to which you previously credited the disposal proceeds and interest.
Your Bank Account balance should now have returned to the balance shown prior to the entry of the interest income and your Assets list should show the new term deposit or bond at the total rolled-over value.