Best practice for recording Guaranteed Investment Certificate (GIC) in brokerage account

Arctic Hare

I have a practice for recording GICs as securities. My practice works OK, but it is deficient in the "market value" remains static at the purchase price through life of ownership. When I view the holdings in my brokerage account (the GICs are held in my brokerage account), the brokerage account reports the actual market value, including earned interest. It would be ideal, if the same market value were reflected in my Quicken account.

Using my practice, I realize a step increase of the total term value of the interest when the GIC comes due and pays out into cash in my brokerage account. This doesn't create a huge issue because the GICs are laddered and my net worth is not terribly skewed in Q because I am not tracked unrealized value gain of the GICs.

Is there another/better way to record GICs such that Q tracks the actual market value as happens inside my brokerage account? 

NotACPA

How are you recording that interest in Q?  It  sounds like a ReinvInt to me.

Arctic Hare

NotACPA - QW HBRP 2019 said:

How are you recording that interest in Q?  It  sounds like a ReinvInt to me.

Yes, but each GIC only pays out the interest at the end of the term. So, for each GIC, I have one purchase transaction, one sell transaction, and one reinvest transaction. This OK, except, it holds the market value in Q at the purchase value through the entire holding period, which is up to 5 years. Whereas, if I view the holdings in my brokerage account, it reports the market value as the cost basis plus interest accrued (but not yet realized).


I was hoping that someone could show me a feature in quicken that would continuously update the market value to mirror what I see in my brokerage account reports. I don’t want to do a bunch of mmual updates as it is not worth the effort. You think it would be a simple matter to update the market value based on interest accrual.


Is my question clear? Should I be posting screen shots of what I’m doing? What I’m doing already works fine except it updates the market value once and ideally it would be updated continuously by a formula.

Unknown

I gave this one a lot of thought.  Your GIC's seem to be the same as USA CD's.  I would treat the market value as change in the price.  So if I "bought" the GIC (1 share for $500 for $500 or 5 shares for $100/share).  When the broker quotes the market value as $595 I would treat this as the Quoted price as $595 (for one share OR $139 per share if you decided a "share" cost $100).  At the end you will have the same $ value when the GIC matures as if you accept all interest as a reinvestment at the end. 

One downside is that you will have to hand edit the price when it changes.  I did this for several years with preferred stocks that OSU does not cover.

As far as the US IRS is concerned this should not (at present) affect income taxes.  The only nuisance I can see to my proposal is the you may have to do a little division by a power of 10 every time the market value changes.    AND you may have to be careful about what the government decides to do with the "reinvestment" when the GIC matures.

If I have not deduced your situation incorrectly, my apologies.

I deduce, also, that you are Canadian.  Where?