Skip to content
Community
Sign in

Registering interests from savings accounts

Help and problemsStarted by @thepatientvisigoth2 replies

Founding memberPosted #1

Hi theređź‘‹

I am wondering what's the best way for representing interests earned from a savings account.

Let's suppose I transferred X from a current account to a savings account with 2.4% interest rate, and after a year I transfer X + interests back to the current account. It seems there is no "Interest" type of transaction for Wallet. At the moment I'm creating the following transactions to avoid negative balance on the savings account:

  • Type: transfer. Outflow: X. From current account to savings account.
  • Type: transfer. Inflow: X + interests. From savings account to current account. -> negative balance
  • Type: transaction. Inflow: interests. In savings account -> resets negative balance.

I am fine with this hack. Just wondering if there is a better way I haven't realized yet.

Cheers!

1 found this helpful

2 replies

  1. StaffPosted #2

    Hi! đź‘‹

    You haven't missed anything, there's no Interest type in the Wallet. But the thing you're calling a hack is actually the right way to do it. Interest is just income landing in that account, and your step 3 is exactly that.

    What's making it awkward is only the dates. The balance goes negative because the money leaves the savings account before you've told us the interest arrived. Put the interest on the day the bank actually paid it, and the problem sorts itself out (it mirrors real life kinda) :

    1. Transfer X, current to savings, dated when you moved it
    2. Transaction, inflow = the interest, into savings, dated when the bank paid it
    3. Transfer X + interest, savings to current, dated when you moved it back

    Same three entries you're already making. Step 2 just sits where it really happened instead of being a correction at the end.

    One thing to watch: leave the category as "Money In".

    Worth explaining why, because otherwise it looks arbitrary. Categories here are really about where money goes, which is why nearly all of them are spending categories. Anything that comes in lands in one pool that you then assign out from, so there only ever needed to be one category on the income side.

    The catch is that the app works out what counts as income from that one category, not from the name. So if you created your own category and called it "Interest", it would get counted as an expense. Nothing would warn you, it would just quietly sit in your spending and drag your savings rate down. That's not great and it's on us to fix, but for now: Money In.

    If you want interest separated out, use a tag.

    The category decides how something is counted. Tags decide how you slice it, and they don't touch the maths at all.

    So: category Money In, tag interest. It still counts as income everywhere it should, and you can filter the Wallet by that tag whenever you want them all in front of you. Tags stack, so interest plus the bank's name plus whatever else, and you can look at it along any of those lines later. Same trick works for salary, bonuses, refunds, side income.

    If you've already entered a year of them for e.g. , don't redo anything. Select them in the Wallet and use Assign tags in the action bar to do the whole lot at once.

    Two small things while I'm here:

    • Set that account's type to Savings in settings, so it's grouped and colored as one
    • If the bank pays monthly or quarterly, enter each payment on its own date instead of one lump at the end. Bit more work, but your monthly income and the balance chart are then right all year rather than only at the end of it

    We're writing up a set of proper how-tos for the help section on the site, and this one's going on the list.

    Cheers! 🥂

    George

    2 found this helpful

  2. Founding memberAuthorPosted #3
    @holdmybetaHi! 👋 You haven't missed anything, there's no Interest type in the Wallet. But the thing you're calling a hack is actually the right way to do it. Interest is just income landing in that account…

    Got it! Thanks.

    That's exactly right. I'll do have 3 brokers with negative balance at the moment because the "Transfer to broker" transactions are registered as regular outflow transactions in the current account. In my case these are easier to delete/recreate as "Deposit to broker" transactions because they are not in the hundreds. But it may be useful for new users to be able to select them and convert into "Deposit to broker" as a batch operation (similar to the "convert into transfer" button but for "Deposit" type).

    Good clarification on the | Money In category đź‘ŤI didn't think it was relevant and I had some inflow transactions set as Savings - General.

Sign in to reply with your Turbobulls account.